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BUYING  BRAINS 


BUYING  BRAINS 


FACTS  REGARDING  THE  ESTABLISHING 

OF  BETTER  BUSINESS  RELATIONS 

BETWEEN  EMPLOYERS  AND 

EMPLOYEES 


BY 

LEON  STEIN 


^ 


*       •  •  • 

»   »  » 


>>,».  »».  »-  » 


NEW  YORK 

AUTHORS  PRESS 

1918 


Copyright,  1918 

BY 

LEON  STEIN 


«  c     e    •    •» 

«    c  •  •*  • 


v^- 


HroocJU 


PREFACE 

The  purpose  of  this  book  is  to  establish 
more  friendly  relations  between  the  em- 
ployer and  the  employee,  making  work 
more  profitable  and  pleasant  for  both. 
This  may  be  accomplished  by  conduct- 
ing business  on  a  scientific  basis,  eHmi- 
nating  waste,  encouraging  proper  de- 
velopment of  employees  and  giving  a 
fair  deal  for  mutual  benefit. 

Leon  Stein 


'  >    ;   i! 


CONTENTS 

CHAPTER  PAGE 

I.  Scientific  Management      ...  n 

The  Growing  Conflict — Produces  Individuality — 
Planning  the  Work — Reward  for  Co-operation — The 
Capacity  Becomes  Known — The  Taylor  System — 
Scientific  Calculations— Influencing  the  Employees — 
The  Gantt  Method — Increased  Profits — Introduction 
of  Scientific  Management — Success  of  Scientific 
Management — Possibilities  of  Scientific  Manage- 
ment— The  Confusing  of  Science  and  System — Scien- 
tific Distribution — Scientific  Advertising — Scientific 
Results — Avoidance  of  Dull  Periods — Environment — 
An  Understanding  of  Men — Testimony  before  Indus- 
trial Commission — Mr.  Frederick  W.  Taylor. 

II.  Service 36 

Service  Rendered  by  Bankers — Public  Service — 
Service  First — Confidence  Established — Truth  in 
Business — Honesty  is  the  Best  Policy — Good  Will  of 
a  Business — Your  Service  Affects  Others — Intelligent 
Service — The  Connecting  Links — A  Permanent  Foun- 
dation —  Impression  —  Indifferent  Service — Discon- 
tented Employers. 


A 


III.  Employment 49 

Hiring — Selection  of  a  New  Employee — ^The  Em- 
ployment Manager — Must  Please  Both  Parties — 
Spreading  the  "Good  Feeling"  Spirit — Filling  Vacan- 
cies— Opportunity — Scientific  Employment — Proper 
Fitness — Analyzing  the  Salesman — The  Normal  Indi- 
vidual—-"The  Right  Man  in  the  Right  Place"— Cita- 
tion of  Cases— On  the  ''Right  Road"— Tact  and 
Talent— Other  Methods— Health  and  Habit— Desir- 
able Applicants — Your  Competitor — Policy — Obtain- 
ing Help — Agencies  versus  Advertising — Proper 
Attitude — Application  Blanks — Bonding — Discharge 
— ^Transfers — Irregular  Employment — Employment 
Manager's  Test. 

7 


'8'  ■'■  ■'  ■•■•'  •••' '; : ..; /-'GONTENTS 


<< 


IV.  Instructions 


/ 


Training  Employees — Proper  Instructions — What 
Others  are  Doing— The  Old  Method— The  Scientific 
Method — Planning — Accomplishing  Results — A  Sug- 
gestion— Thirty  Per  Cent  Increase — Other  Policies 
— A  Side  Light — Necessary  Instructions — The 
Smaller  Shops — The  Salesmen — The  Sales  Man- 
ager— Generalities. 


71 


83 


O 


V.  Development 

The  Start — Promotion — Study  of  Help — Encour- 
agement— Latent  Powers — High  Standards  and 
Ideals — The  Understudy — Bethlehem  Steel  Corpora- 
tion— ^Outside  Help — Helping  Employees  to  Help 
Themselves — "Live  Wires"  and  Contests — Opportun- 
ity for  Development — Post-Education — How  Others 
Help  Employees — Discipline — Fairness — Imposing 
Fines — Loyalty — Worthy  Employees — The  Law  of 
Compensation — Interested  in  Their  Work — Obtaining 
Maximum  Results — The  Giving  of  Suggestions — 
Generalities. 

VI .  Compensation 104 

Comparison — Personal  Equation — Exertion  and 
Results — Former  Practice — Rewarding  Conscientious 
Effort— If  They  Are  Worth  More  to  Others,  They 
are  Probably  Worth  More  to  You — The  Weak  and 
Inefficient — Capital  and  Labor — The  Wage  Problem — 
The  Keeping  of  Records — 'Arousing  Interest — Finan- 
cial Loss — Some  Need  Watching — "Fair  Play" — 
— Improvement  —  Rewards  —  Various  Plans  —  The 
Piece-Rate  Plan — The  Commission  Plan — The  Retail 
Plan — The  Salary  and  Bonus  Plan — The  Scientific 
Plan — The  Gantt  Compensation  Plan — The  Gantt 
Idea  Transplanted — Pay  Day — The  Purchase  Power 
— The  Minimum  Wage — The  Consumer  to  Bear  the 
Burden — The  Orphan — The  Women — The  High  Cost 
of  Living — Reduction  of  Wage — Workmen's  Com- 
pensation— Liability — Various  States — Other  Insur- 
ance— Employers  Awakened. 

VII.  Profit-Sharing    .......     125 

The  Give  and  Take  Principle — Not  Philanthropic- 
Giving  Just  Rewards — Loyalty  the  Return — Sharing 
a  Small  Percentage — A  Comparison — Formulation  of 


CONTENTS 


Individual  Plans— Not  Charity— The  Plans— Profit- 
Sharing  "Ford"— The  Test— Qualifications— Results 
— Dennison  Manufacturing  Company — Facts  and 
Figures — Common  Stock  for  Employees — Some 
Realty  Firms — Capital  and  Labor — A  Boston  Con- 
cern— The  National  Biscuit  Company — The  Lowney 
Chocolate  Company — Mr.  Nelson — Profit-Sharing 
Still  in  Its  Infancy — The  Small  Concern — Its  Ad- 
vantage to  a  Small  Concern — The  Ambitious  Em- 
ployee— Wasteful  Competition — The  Cause — Initia- 
tive Will  Find  Its  Way — Logic — Pension  Funds — 
Fixed  Percentage — The  Most  Successful  Method — 
Part  Cash,  Part  Stock — Another  Plan — Resume. 


VIII.  Welfare 


140 


Radical  Criticism — Personal  Equation — An  Indi- 
rect Benefit — Cleveland  Chamber  of  Commerce — 
Isolated  Factories — Company  Stores  Unfair — Bureau  f/ 

of  Labor  Statistics — Safety  of  Employees — Committee 
of  "  Safety  First" — Safeguards — Suggestion  Box — 
Yearly  Accidents — Hours  of  Labor — Maryland  Sta- 
tistics— Book  of  Rules  on  Health — Ventilation — Tem- 
perature— Comforts  of  Employees — The  Sick  Room — 
Ideal  Conditions  —  Comfort  Stations  —  Dressing 
Rooms  and  Lockers — Lunch  Rooms  and  Restaurants 
— Libraries  and  Reading  Rooms — Education — Ath- 
letic and  Social  Clubs — Picnics  and  Outings — Vaca- 
tions— Savings  Banks — Benefit  Funds — An  Inven- 
tory. 

/^IX.  Unions i5o 

The  Typographical  Union — Relief  of  Its  Mem- 
bers— No  Evil  Impression — Others  Organize — De- 
structive Methods — How  to  Eliminate  the  Unions — 
Credit  Due  the  Unions — What  the  Public  Demands — 
The  Fair  and  Square  Deal — Both  at  a  Loss — Arbi- 
tration— The  Influence  of  Public  Sentiment — The 
State  Board — Strikes  and  Lockouts — An  Action  at 
Law — Signing  the  Application — Expert  Assistants — 
The  National  Arbitration  Board — Control  of  the 
Situation — Acts  of  Violence — A  Noteworthy  Case — 
A  Weakened  Attitude — Philanthropy — Getting  in 
Close  Touch  with  Employees — Working  Hand  in 
Hand — Improving  the  Standards — Some  Objections 
— Opinions  of  Efficiency  Engineers — Solution  of  the 
Problem — Granting  Demands — Paid  According  to 
Time — Co-operation  of  Unions — Increasing  Recog- 
nition. 


lo  CONTENTS 

X.  Co-operation i8i 

Pulling  Together — Modern  Ideas  —  Combined 
Efforts — Accomplishing  Results — Profitable  Mutual 
Advantage — Special  Advantages — The  Associated 
Advertising  Clubs  of  the  World — The  True  Value 
of  Co-operation — Of  Value  to  All  Concerns — Service 
Departments — Retailers'  Co-operation — Merchants' 
Co-operation — Co-operative  Societies — Co-operation 
with  Employees — Officers — An  Individual  Board  of 
Trade — Loyalty  and  Fair  Treatment — Negligence — A 
Stimulus  Needed — Success  Through  Co-operation. 

XI.  Elimination  of  Waste 200 

Profits  Derived  from  Waste— The  "World  War," 
the  Greatest  of  Wastes — American  Waste — Very- 
Few  Succeed — 76  Reasons  Why  Merchants  Fail — 
Waste  of  Time — Value  of  Time — Efficient  Methods — 
Unsystematic  Methods — Irregular  Employment — 
Avoidance  of  Waste  of  Space — Analysis — Wasteful 
Buying — Conservatism — The  Dangers  of  Subsidizing 
— Diagnosis — Economy — Comparisons — Wasted  Op- 
portunities. 

XII.  Buying  Brains      .      .      .      .      .      .      .     217 

Consulting  the  Physician — The  Counselor  of  Busi- 
ness— The  Need  of  a  Thinking  Machine — Where  the 
Scientific  Man  Shines — Confidence  Begets  Confi- 
dence— In  the  Limelight — Retrogression — If  You 
Consider  Your  Prestige  Worth  Anything,  Buy  Brains 
— Records  of  Costs  are  Necessary — Carelessness  in 
Credits — Generalities — Things  You  Should  and 
Should  Not  Do. 


BUYING  BRAINS 


CHAPTER  I 
SCIENTIFIC  MANAGEMENT 

SCIENTIFIC  management,  under  the  leadership  of 
Mr.  Frederick  W.  Taylor,  has  revolutionized  the 
steel  business  and  it  has  been  successfully  tried  in  many 
other  important  industries.  While  Mr.  Taylor  and 
his  associates,  during  the  past  thirty  years,  have 
inaugurated  his  system  in  large  concerns,  it  was  not 
until  recently  understood  by  many  individuals. 

Scientific  management  has  long  since  passed  the 
theoretical  stage.  Wherever  it  has  been  intelligently 
introduced,  the  results  have  been  beneficial  to  both 
employer  and  employee. 

Scientific  management  has  been  well  described  in 
books  by  Mr.  Frederick  W.  Taylor,  Mr.  H.  L.  Gantt, 
Mr.  Harrington  Emerson,  and  other  distinguished 
writers.  Many  of  their  illustrations  relate  actual  ex- 
periences and  accomplishments  in  the  large  mills,  fac- 
tories and  railroads  with  which  they  have  been  con- 
nected. It  has  helped  to  elevate  commercial  standards 
to  such  an  extent  that  several  prominent  writers,  in 
discussing  scientific  management,  have  referred  to 
^'business  as  a  profession." 

In  the  past,  it  has  been  the  ambition  of  some  of  our 
most  successful  men  to  have  their  children  learn  a 
profession.    In  the  future,  it  is  hoped  they  will  induce 

11 


12  BUYING  BRAINS 

them  to  study  scientific  and  modern  business  manage- 
ment so  that  they  may  improve  the  commercial  foun- 
dations which  have  already  meant  years  of  effort, 
practice  and  self-sacrifice. 

Scientific  management  is  regarded  as  a  typical 
American  movement,  as  indeed  it  is  a  universal  neces- 
sity. 

Many  European  concerns  have  sent  their  best  engin- 
eers to  his  Continent  to  study  and  investigate  our 
methods  of  scientific  management. 

The  large  capitalization  of  our  industries  and  the 
steadily  increasing  population  make  it  necessary  that 
we  supply  a  large  portion  of  our  own  wants,  as  well 
as  obtain  a  liberal  share  of  foreign  trade.  The  Ameri- 
can wage  is  so  much  higher  than  the  scale  in  other 
countries,  that,  while  our  industries  are  protected  to 
some  extent  at  home,  they  are  at  a  disadvantage  when 
they  seek  trade  elsewhere.  To  overcome  the  differ- 
ences in  wages,  the  output  per  man  per  diem  must 
be  increased  and  the  production  cost  reduced. 

This  is  exactly  what  scientific  management  has  ac- 
complished— a  lower  production  cost  and  a  higher 
wage  scale.  By  creating  additional  markets  for  Ameri- 
can products,  it  improves  our  trade  balance  and  de- 
stroys the  foremost  argument  of  opponents  of  scientific 
management,  that  workmen  will  be  thrown  out  of 
employment  if  the  capacity  of  the  individual  is 
increased. 

While  the  recorded  figures  from  the  large  indus- 
tries that  have  installed  scientific  management  were 
naturally  most  startling,  proportionate  results  have 
been  discovered  in  smaller  establishments.  If  only  the 
larger  concerns  adopted  the  modern  methods,   they 


SCIENTIFIC  MANAGEMENT  13 

would  continue  to  outgrow  the  smaller  ones,  and  com- 
pel them  to  meet  unfavorable  markets  and  competition. 

The  smaller  employer  coming  in  contact  with  his 
employees  daily,  has  a  personal  influence  which  would 
make  it  comparatively  easy  to  readjust  working  con- 
ditions to  a  more  scientific  basis. 

Scientific  management  analyzes  what  is  to  be  done 
and  carefully  indicates  the  best  way  to  do  it;  then  helps 
to  select  the  right  man  for  the  right  place,  and  shows 
him  the  scientific  method  of  performing  the  task. 
Every  possible  assistance  is  extended  to  him  to  simpHfy 
his  work,  to  make  it  pleasant,  and  have  him  obtain 
maximum  results  with  the  minimum  expenditure  of 
energy.  Scientific  management  thinks  for  and  of  the 
workman. 

The  Growing  Conflict. — There  has  been  a  growing 
conflict  between  the  employer  and  employee. 

Scientific  managment  recognizes  that  the  employer 
and  the  employee  have  a  mutual  interest  at  heart,  and 
in  order  to  lower  the  cost  of  production  and  increase 
wages,  it  is  necessary  that  both  accept  working  con- 
ditions that  are  equitable ;  each  to  receive  a  fair  return 
for  his  share  in  increasing  the  efficiency  of  an  organ- 
ization. The  employer  must  provide  the  proper  as- 
sistance and  pay  a  fair  wage ;  the  employee  must  give 
his  best  efforts  to  the  employer.  In  the  past,  both 
employer  and  employee  considered  only  their  individ- 
ual welfare,  and  each  failed  to  recognize  the  harmoni- 
ous side  and  the  rights  of  the  other. 

In  every  struggle,  whether  commercial  or  otherwise, 
there  must  be  leaders  and  there  must  be  men;  to  win 
success,  all  must  work  together.  The  men  must  be 
loyal  to  the  leaders,  who  in  turn  must  be  fair  to  the 


14  BUYING  BRAINS 

men.  The  employee  is  dependent  upon  the  employer 
for  his  livelihood;  the  employer  is  dependent  upon 
the  employee  for  his  profits.  If  the  employee  is  dis- 
satisfied, he  may  change  his  employment  and  the  em- 
ployer may  change  his  employees  if  he  so  elects,  but 
these  changes  will  not  alter  the  results  unless  the  con- 
ditions are  changed — by  making  the  men  satisfied,  they 
in  turn  will  appreciate  the  principle  of  fairness. 

Produces  Individuality. — Scientific  management 
encourages  better  work;  it  shows  the  workman  the 
best  method  of  performing  his  task  and  rewards  him 
for  his  efforts.  He  is  not  judged  by  a  few  moments 
of  observation  or  a  prejudiced  opinion;  nor  is  he 
grouped  with  a  number  of  workmen  and  paid  an  , 
average  wage  for  the  efficient  and  the  inefficient.  His 
ability  is  measured,  recorded  and  paid  for,  according 
to  definite  results. 

Scientific  management  produces  an  individuality 
and  raises  the  standard  of  men,  workmen  are  not 
afraid  of  doing  more  than  others  receiving  the  same 
pay,  and  they  are  thus  encouraged  to  do  their  maxi- 
mum and  are  proud  of  their  achievements.  There  are 
employees  who  are  excellent  thinkers  but  poor  work- 
ers, while  others  who  do  not  think  properly  are  ex- 
ceptional workmen.  Scientific  management  separates 
the  two  classes,  giving  each  an  opportunity  to  bring 
his  best  qualities  into  play. 

Planning  the  Work. — Each  factory  has  its  plan- 
ners who  study  the  work  to  be  done  and  experiment  1 
until  they  finally  arrive  at  the  best  method  of  per-  J 
forming  the  operation.     An  able  workman  is  selected/ 
and  tests  made  as  to  the  time  required  by  the  average/ 
workman   to   complete  a  particular  operation.    The 


SCIENTIFIC  MANAGEMENT  15 

work  is  planned  ahead,  the  material  necessary  is  care- 
fully calculated  and  ordered  for  a  definite  delivery. 
In  this  manner  the  employer  is  enabled  to  accurately 
estimate  the  cost  of  the  finished  product,  and  the  time 
that  should  be  allotted  for  the  completion  of  the  work. 
It  is  a  matter  of  calculation  and  there  is  no  necessity 
for  guess  work. 

The  workman  does  not  accept  antiquated  instruc- 
tions from  the  foreman  or  other  workmen,  but  before 
beginning  a  task,  is  given  the  benefit  of  the  experi- 
ments and  tests  previously  made.  He  is  shown  the 
standard  way  of  performing  the  task,  thus  eliminating 
incorrect  and  needless  motions. 

A  workman  does  not  waste  his  time  and  energy 
worrying  over  his  inability  but  concentrates  his  entire 
attention  and  efforts  to  the  carrying  out  of  the  in- 
structions given  him.  A  workman  is  not  expected  to 
be  an  expert  machinist  nor  supposed  to  do  eflficient 
work  with  machines  in  poor  condition.  The  machines 
are  regularly  inspected  and  kept  in  proper  condition 
by  machinists  employed  for  that  purpose. 

While  the  planners  are  employed  to  do  the  thinking 
for  the  workmen,  the  planners  should  not  be  arbitrary 
but  must  tactfully  receive  and  test  the  suggestions  made 
by  men  who  are  performing  the  work. 

Under  customary  management,  the  foreman  is  asked 
how  long  it  would  be  required  for  a  given  task,  and 
he  makes  a  conservative  guess;  under  scientific  man- 
agement he  is  told  the  time  allotted  for  the  work.  Un- 
der customary  management,  the  foreman  has  a  varied 
list  of  duties,  some  of  which  he  is  incapable  of  doing; 
under  scientific  management  his  work  is  simplified  and 
carefully  outlined  for  him. 


i6  BUYING  BRAINS 

Men  are  not  all  equal,  mentally  or  physically,  and 
the  responsibility  of  misplacing  men  is  upon  the  man- 
agement; therefore  the  inefficient  should  be  assisted  in 
the  performance  of  a  task.  On  the  other  hand,  if  a 
man  proves  he  is  capable  of  doing  better  and  more 
profitable  work,  an  opportunity  should  be  given  him, 
thus  not  only  satisfying  the  individual  but  stimulating 
others  who  are  ambitious  to  improve  and  advance. 

The  planners  who  stipulate  an  impossible  task,  or 
one  which  causes  overwork  or  strain,  do  a  great  in- 
justice to  employers  and  employees  alike. 

Scientific  management  teaches  fairness — an  unfair 
planner  or  instructor  has  no  right  to  be  associated 
with  it. 

Reward  for  Co-operation. — The  compensation 
should  be  liberal,  for  workmen  who  co-operate  with 
the  management  and  are  successful  in  performing  their 
tasks.  The  saving  effected  by  the  elimination  of  waste 
should  be  divided.  Workmen  should  not  be  expected 
to  increase  their  capacity  without  receiving  additional 
reward. 

Unscrupulous  employers  who  expect  to  be  the  only 
beneficiaries,  will  discover  that  the  workmen  will  be- 
come dissatisfied  and  will  furthermore  discourage 
more  worthy  employers  from  introducing  scientific 
management. 

Under  certain  systems,  some  men  are  capable  of  do- 
ing more  and  better  work  than  others,  but  scientific 
management  enables  all  men  to  achieve  greater  results 
and  the  efficient  man  is  encouraged  to  do  his  maximum 
amount  of  work.  The  inefficient  workman  receives 
great  assistance  as  he  has  others  to  direct  him  intelli- 
gently and  is  relieved  of  his  chief  handicap.     When 


SCIENTIFIC  MANAGEMENT  17 

each  employee  is  endeavoring  to  give  his  best  efforts, 
the  capabiHty  of  a  workman  is  increased  and  his  possi- 
bihties  are  soon  discovered.  In  this  manner,  men  are 
selected  for  higher  positions  and  the  steady  advance- 
ment has  a  tendency  to  make  them  maintain  better 
habits  and  become  more  interested  in  their  work.  In- 
deed this  principle  becomes  an  important  factor. 

The  Capacity  Becomes  Known. — Most  men,  both 
employers  and  employees,  are  able  to  increase  their 
energy  and  ability.     Scientific  management  furnishes      1 
the  necessary  assistance,  incentive  and  co-operation,     i 
The  average  person  does  not  realize  what  he  is  capable    / 
of  doing,  but  is  contented  if  he  succeeds  in  matching 
the  results  of  others.    This  is  demonstrated  when,  if  an 
unusually  good  workman  is  employed  the  increase  of 
speed  of  the  entire   force  in  a  department  will  be 
noticed. 

In  customary  management,  there  is  too  much  in- 
decision ;  everyone  appears  to  be  undecided  as  to  how 
the  work  should  be  done,  the  time  required,  etc.  Un- 
der scientific  management,  the  work  is  arranged  ahead, 
the  plans  are  definite,  and  each  employee  has  an  indi- 
vidual task  to  perform.  Each  man's  task  consists  of 
what  he  is  capable  of  doing.  Assistance  is  extended, 
and  he  knows  what  his  reward  will  be  if  he  succeeds. 
The  workman  has  no  opportunity  to  deceive  the  fore- 
man or  the  employer,  his  results  are  tabulated  and 
recorded ;  the  planners  know  what  similar  work  should 
cost  and  the  time  required  for  producing  it. 

The  Taylor  System. — Under  the  Taylor  System, 
in  addition  to  the  planners,  instructors  and  foremen, 
there  is  the  gang  boss,  the  speed  boss,  the  inspector, 
route  clerk,  time  and  cost  clerk,  who  are  necessary  to 


i8  BUYING  BRAINS 

properly  conduct  scientific  management  in  a  large  shop 
on  an  elaborate  scale.  In  smaller  shops  the  expense  of 
having  too  much  non-productive  labor  would  make  it 
advisable  to  combine  some  duties,  as  the  overhead 
charges  would  be  in  proportion  to  the  capacity  of  the 
plant. 

In  many  instances,  under  scientific  management, 
workmen  have  been  able  to  more  than  double  their 
output,  therefore  the  expense  of  the  planning  depart- 
ment is  a  comparatively  small  item,  when  you  consider 
the  production  cost  is  lowered,  in  addition  to  which 
there  are  the  benefits  derived  by  the  employer  and  the 
employee. 

By  teaching  each  man  the  proper  method  of  per- 
forming a  task,  the  product  is  also  standardized  and 
the  quality  and  finish  of  the  article  will  not  vary.  Un- 
der customary  management,  mistakes  and  misunder- 
standings constantly  arise ;  the  responsibility  is  shifted 
from  shoulder  to  shoulder,  employees  become  angry 
with  each  other  and  results  are  unsatisfactory. 

Scientific  management  avoids  many  of  these  mis- 
takes and  misunderstandings,  specifies  the  duties  of 
each  man  who  usually  measures  up  to  his  own  responsi- 
bility. 

Scientific  Calculations. — In  the  matter  of  con- 
tracts, scientific  management  is  helpful  to  employers. 
Bids  are  not  made  ridiculously  high,  nor  too  low,  the 
contracts  are  not  awarded  to  concerns  who  will  do  the 
work  without  profit,  or  who  find  it  impossible  to  meet 
their  obligations. 

Contracts  are  based  on  past  records  and  calculations 
are  made  intelligently.  It  is  not  unusual  to  have  sales- 
men or  even  employers  quote  prices  in  various  quan- 


SCIENTIFIC  MANAGEMENT  19 

titles,  but  who  when  questioned  regarding  delivery 
are  unable  to  give  a  satisfactory  answer. 

Under  scientific  management  there  is  not  only  a  cost 
system,  but  a  time  system  and  the  date  of  delivery  can 
be  calculated  with  as  much  accuracy  as  the  cost  of  the 
product.  To  merely  determine  a  task  which  calls  for 
an  increase  of  effort,  greater  results  cannot  be  calcu- 
lated without  considering  the  source  of  the  supply. 

Influencing  the  Employees. — Scientific  manage- 
ment requires  a  readjustment  of  the  compensation, 
which  is  the  essential  factor  in  influencing  the  employee 
to  furnish  the  needed  co-operation.  If  the  compensa- 
tion is  fair,  the  human  mind  which  controls  the  muscles 
is  satisfied  and  the  maximum  ability  of  the  employee  is 
thus  obtained. 

Compensation  means  more  to  an  employee  than 
profits  to  an  employer  as  it  determines  for  the  em- 
ployee how  large  a  room  he  can  afford  to  occupy,  the 
quality  of  food  he  can  purchase,  the  clothes  he  may 
wear  and  the  recreation  he  can  enjoy. 

Increased  compensation  means  greater  comfort,  bet- 
ter nourishment,  a  satisfied  appearance  and  develop- 
ment of  the  mind.  Fair  wages  make  employees  enjoy 
their  work  and  become  interested  in  it,  and  it  also  has 
a  tendency  to  stimulate  the  brain  and  quicken  the 
muscle. 

Under  scientific  management  employees  receive 
higher  wages  because  the  able  and  ambitious  types  are 
attracted,  and  those  who  desire  to  be  paid  for  work 
which  they  do  not  produce  are  driven  away  and  greater 
profits  are  thus  derived. 

Employees  are  naturally  influenced  by  the  attitude 
and  speed  of  the  men  who  surround  them.   It  is  quite 


20  BUYING  BRAINS 

simple  to  place  a  workman  in  a  scientific  shop,  show 
him  the  correct  method  of  performing  a  task  and  have 
him  equal  the  performance  of  others. 

The  Gantt  Method. — Under  scientific  management, 
there  have  been  various  methods  of  compensation  in- 
troduced, but  the  one  most  approved  of  is  that  sug- 
gested by  Mr.  H.  L.  Gantt.  Each  employee  is  paid 
a  stated  amount  per  diem,  which  should  be  the  current 
rate  for  similar  work,  and  if  the  specified  task  is  com- 
pleted an  extra  bonus  is  given.  The  task  should  not 
be  an  impossible  one,  nor  one  that  causes  a  strain,  and 
if  proper  assistance  is  given  under  favorable  condi- 
tions, workmen  cultivate  a  habit  of  working  at  a  regu- 
lated speed  without  undue  exertion. 

Foremen  and  instructors  who  are  instrumental  in 
helping  the  workmen  attain  the  desired  results  should 
also  be  proportionately  remunerated  so  that  they  will 
render  assistance  where  it  is  most  needed. 

Increased  Profits. — The  increased  capacity  of  the 
individual  is  but  one  of  the  many  advantages  that 
scientific  management  offers,  eliminating,  as  it  does, 
errors  of  omission  and  commission.  The  overhead  ex- 
penses, cost  of  supervision,  rental,  heat,  light  and  many 
other  items  are  decreased. 

By  increasing  the  output  of  a  plant,  the  surplus  pro- 
duction can  change  a  loss  into  a  profit,  or  may  even 
double  the  profit. 

A  firm  selling  approximately  $200,000  annually^ 
making  a  comparatively  small  profit,  was  compelled  to 
stop  taking  orders  before  the  end  of  each  season.  By 
increasing  its  output  25  per  cent,  without  requiring 
additional  space  or  employees  it  earned  nearly  three 
times  its  former  net  profits.    A  concern  must  do  a  cer-. 


SCIENTIFIC  MANAGEMENT  21 

tain  volume  of  business  before  the  current  expenses 
can  be  paid.  If  the  capacity  of  the  plant  does  not 
permit  this,  it  is  impossible  to  earn  a  profit ;  if  the  pro- 
duction is  increased  and  the  overhead  expenses  de- 
creased, profits  are  made  possible. 

Introduction  of  Scientific  Management. — The  in- 
troduction of  scientific  management  into  an  industry 
requires  tact,  judgment  and  common  sense.  In  several 
instances  the  introduction,  of  scientific  management  has 
failed,  simply  because  the  management  would  not  give 
it  a  fair  test.  Many  persons  are  sceptical  of  new 
ideas,  especially  when  originating  from  one  whom  they 
consider  antagonistic,  and  it  is  perfectly  natural  that 
when  scientific  management  is  suggested  by  an  em- 
ployer, the  employee  regards  it  as  a  selfish  advantage 
for  the  employer. 

All  the  members  of  a  firm,  or  the  directors  of  a 
corporation,  must  be  thoroughly  in  harmony  with  the 
spirit  of  the  movement.  Do  not  expect  to  convince 
them  of  its  benefits  during  the  introduction.  As  you 
progress,  their  support  and  co-operation  is  needed  in 
making  it  a  success.  After  establishing  harmony 
among  the  men  who  furnish  the  finances,  scientific 
management  should  be  explained  to  the  heads  of  the 
various  departments,  and  they  should  be  shown  the 
advantages  it  offers  both  workmen  and  employers. 

If  you  have  been  unfair  to  the  employees  during 
the  past  and  intend  to  introduce  scientific  management 
with  a  spirit  of  fairness,  inform  them  frankly  of  the 
changed  attitude  you  contemplate  in  the  future. 

The  department  heads  are  your  representatives. 
You  speak  through  them.  If  they  believe  in  scientific 
management  and  have  faith  in  your  promises,  they 


22  BUYING  BRAINS 

should  be  able  to  secure  the  co-operation  of  the  em- 
ployees in  their  departments. 

In    introducing   scientific   management,    some   em- 

iployers  have  considered  it  as  a  plan  to  be  attended  to 
in  the  spare  moments,  while  others  have  done  the  re- 
verse, and  tried  to  rush  matters,  thinking  it  advisable  to 
''press  the  button"  and  have  it  simultaneously  start  in 
every  department. 

Select  the  department  that  will  be  most  helped  and 
i  the  results  cannot  be  disputed  by  the  most  sceptical. 
I  The  employee  who  co-operates  should  receive  a  liberal 
I  reward.  The  facts  will  shortly  become  known 
'  throughout  the  establishment  and  its  introduction  will 
be  welcomed  in  other  departments. 

In  this  manner  you  are  not  arbitrarily  forcing  upon 
them  a  condition  that  they  do  not  want,  but  are  grant- 
ing improved  opportunities  and  increased  earnings 
which  they  deserve.  You  cannot  expect  to  obtain  the 
maximum  results  at  once;  it  will  require  some  time 
before  you  win  the  men  from  taking  their  time  and 
loafing  periodically,  to  working  steadily  and  at  a 
greater  speed. 

There  is  a  decided  advantage  in  having  scientific 
management  introduced  by  one  who  thoroughly  under- 
stands its  fundamental  laws  and  principles,  and  one 
who  has  had  no  previous  connection  with  the  establish- 
1  ment.  He  has  made  no  enemies  who  will  interfere 
with  him,  nor  has  he  made  previous  errors  that  will 
make  it  difficult  to  suggest  ideas  that  are  directly  op- 
posite to  what  he  may  have  favored  during  the  past. 
Those  introducing  scientific  management,  including 
the  planners  and  instructors,  should  exercise  the  ut- 
most tact,  and  no  attempt  should  be  made  to  belittle  or 


SCIENTIFIC  MANAGEMENT  23 

ridicule  others  for  past  performances,  as  one  dislikes 
being  reminded  of  inferior  methods  that  he  has  prac- 
ticed daily  for  many  years. 

A  careful  analysis  should  be  made  of  any  contem- 
plated change,  thus  affording  no  opportunity  to  the 
opposition  or  to  the  sceptic  who  will  enlarge  on  any 
shortcomings. 

In  making  a  time  study,  it  is  preferable  to  do  so 
without  standing  near  the  men  with  a  watch ;  some  men 
do  not  object  to  having  their  work  timed  and  recorded 
but  are  opposed  to  a  watchman  counting  every  move- 
ment they  make. 

Some  employees  imagine  the  entire  saving  should 
belong  to  them.  It  should  be  explained  that  the  ex- 
pense of  the  planning  department  must  be  paid  and 
that  a  portion  of  the  saving  effected  belongs  to  the 
employers  who  furnish  the  capital  that  makes  scientific 
management  possible. 

If  the  introduction  is  conducted  intelligently  and  the 
rewards  are  fair,  the  workmen  will  recognize  its  ad- 
vantages and  will  feel  grateful  and  loyal  to  those  who 
are  responsible  for  it. 

Scientific  management  will  not  appeal  to  the  "know- 
-it-alls," or  to  employers  who  are  willing  to  follow  the 
ilead  of  their  competitors,  but  it  will  be  introduced  by 
progressive  men  with  imagination  who  desire  to  ren- 
der greater  service  to  their  patrons,  to  improve  the 
conditions  of  the  employees  and  at  the  same  time  seek 
larger  financial  returns  for  themselves. 

Hon.  Thomas  Mott  Osborne,  retired  manufacturer, 
formerly  warden  at  Sing  Sing  prison,  in  an  address 
at  Chautauqua  stated  that  "he  was  endeavoring  to 
teach  efficiency  to  the  prisoners;  he  was  determined 


24  BUYING  BRAINS 

that  each  man  should  be  an  efficient  worker  when  he 
left  the  prison,  no  matter  what  work  was  undertaken, 
— even  if  'cracking  safes,'  he  should  be  able  to  do  it 
efficiently."  If  prisoners,  who  include  the  lowest  types 
of  men,  can  be  taught  efficiency,  it  should  be  compara- 
tively easy  to  instruct  the  normal  workmen  who  will 
receive  equal  benefits  by  its  practice. 

Success  of  Scientific  Management. — Scientific 
management  has  been  tried  successfully  in  most  of  the 
important  industries  of  this  country,  which  proves  con- 
clusively that  its  principles  are  correct,  that  the  em- 
ployers and  employees  throughout  the  country  in  the 
various  occupations  are  very  much  alike,  and  that  op- 
portunities for  improvement  of  conditions  exist  if  the 
employers  will  only  take  the  initiative. 

Scientific  management  is  now  being  conducted  in 
some  of  the  leading  concerns  in  the  following  in- 
dustries : 

Agricultural  implements,  automobiles,  building  con- 
struction, book  binding,  brewing,  beet  sugar,  boxes, 
buttons,  bleaching  and  dyeing,  cottons,  clothing,  cord- 
age, carriage  and  wagon  building,  electrical  machinery, 
firearms,  flour,  food  products,  furniture,  glass,  hard- 
ware, lumber,  locomotives,  metal  working,  machine 
tools,  printing,  pianos,  paper,  pumps,  rubber  goods, 
sewing  machines,  shoes,  soaps,  steel,  textiles,  tin  cans, 
tanks,  typewriters,  velvets  and  woolens,  etc. 

Most  persons  connect  scientific  management  with 
manufacturing  because  that  branch  of  trade  has  been 
mainly  helped  by  the  advice,  influence  and  assistance 
of  the  pioneers  of  the  movement. 

It  is  fortunate  for  the  steel,  as  well  as  other  indus- 
tries, that  Mr.  Frederick  W.  Taylor  devoted  his  life 


1 


SCIENTIFIC  MANAGEMENT  25 

to  manufacturing,  but  the  fundamental  principles  of 
scientific  management  have  also  been  successfully  ap- 
plied to  distribution,  retailing  and  managing  an  office. 

Possibilities  of  Scientific  Management. — There 
are  even  greater  opportunities  and  possibilities  in  dis- 
tribution than  in  manufacturing,  to  establish  a  better 
understanding  and  relationship  between  the  employers 
and  the  employees. 

The  workmen  in  the  factories  are  largely  organized, 
and  they  have  demanded  and  obtained  many  conces- 
sions; they  have  had  strikes,  discussed  their  views 
publicly  and  many  of  their  differences  have  been  settled 
to  the  satisfaction  of  both  parties. 

In  distribution,  the  disputes  remain  unsettled  and 
instead  of  settling  their  grievances,  the  employees 
spend  a  large  portion  of  their  time  criticising  their 
employers. 

While  the  organized  employees  conduct  their  strikes, 
thus  causing  temporary  idleness,  the  others  retaliate 
by  limiting  the  quantity  and  quality  of  service  they  de- 
liver to  the  employer.  If  you  would  make  a  careful 
analysis  of  what  the  average  employee  accomplishes 
during  a  day  and  compare  it  with  what  he  is  capable 
of  doing,  the  discrepancy  totals  a  most  pitiful  loss. 
It  may  surprise  you  to  know  that  the  average  em- 
ployee is  only  sixty  per  cent,  efficient. 

Every  business  furnishes  an  opportunity  to  offer  the 
proper  incentive  to  employees  to  increase  their  energy 
and  achieve  better  results.  Any  activity  can  be  di- 
vided into  its  elements ;  the  work  of  an  individual  can 
be  measured  and  compared  and  he  should  be  equitably 
rewarded. 

There  is  a  simple  and  correct  method  for  the  per- 


26  BUYING  BRAINS 

iformance  of  any  task  and  the  employee  should  be  in- 
structed before  attempting  the  problem.  Every  opera- 
tion should  be  carefully  planned  in  advance,  the  under- 
taking should  be  analyzed,  the  calculations  based  on 
previous  records  and  experimenting  should  be  done 
before  the  task  is  assigned. 

The  Confusing  of  Science  and  System. — Scien- 
tific management  is  often  confused  with  systematic 
management.  The  scientific  man  should  be  systematic 
but  the  systematic  is  not  always  scientific.  The  one 
produces  a  saving  of  time  and  energy  by  discovering 
the  simplest  way  of  performing  a  task  while  the  other 
often  does  quite  the  reverse  by  inaugurating  too  much 
system. 

There  are  many  systems  introduced  that  are  not 
maintained  for  a  long  period,  in  fact  a  great  many  sys- 
tems are  started  which  are  stopped  before  they  are 
completely  installed.  There  is  not  sufficient  thought  or 
planning;  therefore,  before  a  new  system  is  added,  it 
should  be  scientifically  analyzed  to  determine  its  fit- 
ness for  the  purpose  intended.  Its  advantages  and 
disadvantages  must  be  considered,  the  time  and  energy 
saved  and  required,  whether  it  will  help  to  give  better 
service  or  retard  it. 

Scientific  Distribution. — If  a  manufacturer  effects 
a  saving  through  scientific  management  in  production 
and  wastes  an  equal  amount  in  distribution,  he  has  not 
gained  any  advantage  over  a  competitor  doing  the  re- 
verse. Too  great  an  expense  in  marketing  a  product 
and  the  neglect  of  too  many  opportunities  for  finding 
suitable  outlets  is  a  severe  handicap.  Before  manu-. 
facturing  an  article  you  must  be  certain  that  there  will 
be  a  demand  for  it  and  you  must  plan  to  supply  the 


i 

\ 


SCIENTIFIC  MANAGEMENT  27 

demand  without  too  large  an  expenditure.  Of  all  the 
articles  patented,  there  are  less  than  five  per  cent,  that 
are  successfully  manufactured  and  distributed. 

Manufacturers  in  some  instances  sell  to  jobbers 
when  they  should  dispose  of  their  product  direct  to  the 
retailer;  in  other  instances  they  attempt  to  save  the 
jobbers'  profits,  when  they  are  the  ones  to  handle  the 
product.  Too  frequently  an  attempt  is  made  to  sell 
both  the  jobber  and  retailer  without  affording  the  job- 
bers protection  and  giving  them  the  assistance  which 
they  are  entitled  to  receive. 

Before  a  campaign  is  started,  plans  should  be  care- 
fully analyzed  and,  after  beginning,  it  should  be  scien- 
/  tifically  managed.  There  is  too  much  action  with  too 
/  little  thought;  often  men  act  first  and  think  after- 
/  wards.  The  thinking  should  precede,  not  follow.  The 
I  checker  player  before  making  a  move  will  consider  the 
1  effect  of  such  a  move.  It  is  the  same  in  business,  you 
\  should  not  rush  forward  without  calculating  the  pos- 
j    sibilities  and  results  of  the  next  move. 

Executives  often  permit  men  not  qualified  to  do  the 
thinking,  then  abuse  them  for  their  mistakes.    It  is  far 
better  to  advise  them  before  the  errors  are  committed. 
After  a  public  calamity  the  people  are  aroused,  new 
laws  are  quickly  enacted  to  prevent  a  repetition ;  but  if 
our  legislators  studied  the  condition  in  advance  scien- 
tifically, the  calamity  could  have  been  avoided. 
.        The  sooner  we  realize  there  is  a  reason  for  every- 
V  thing — both  success  and  failure — there  will  be  more 
\  successes  and  fewer  failures.     In  selecting  men  to  aid 
you  in  the  distribution,  their  ability  and  experience 
must  be  taken  into  consideration  and  you  should  be 
certain  that  each  man  is  fitted  for  his  particular  work. 


28  BUYING  BRAINS 

After  he  is  selected,  everything  possible  should  be  done 
to  make  his  work  simple,  pleasant  and  successful.  Sat- 
isfaction with  one's  labor  proves  mutually  profitable. 

Men  are  promoted  from  one  position  to  another 
because  they  have  "made  good,"  and  when  others  are 
\  appointed  to  occupy  their  former  positions  they  should 
I  receive  the  advice  and  suggestions  from  those  who 
I  have  been  successful.  An  employee  frequently  fails 
/  because  he  has  had  a  bad  start ;  his  beginning  is  marked 
f  with  disappointments  which  are  the  result  of  theoreti- 
cal practices. 

A  solicitor  for  magazines  made  three  small  fortunes 
in  obtaining  subscriptions;  each  time  he  lost  it  in  un- 
dertakings he  did  not  understand  or  study  before  in- 
vesting his  money.  His  last  experience  in  soliciting 
was  terminated  by  winning  the  first  prize  in  a  contest 
with  hundreds  of  solicitors  competing;  he  was  re- 
quested to  address  the  others,  telling  them  how  he  suc- 
ceeded and  the  entire  organization  was  helped  by  his 
knowledge  and  experience. 

In  the  meantime,  hundreds  of  solicitors  had  become 
discouraged  who  would  have  succeeded  if  they  had 
begun  with  the  assistance  they  needed  and  deserved. 

It  is  the  same  in  the  distribution  of  any  commodity; 
too  many  endeavors  to  distribute  a  product  not  under- 
stood, without  assistance  and  knowledge  that  should 
first  be  given. 

Scientific  Advertising. — In  advertising  a  product, 
the  campaign  should  be  carefully  planned,  an  appro- 
priation made  and  a  definite  programme  followed ; 
there  are  many  merchants  who  take  "fliers,"  and  nat- 
urally do  not  "land"  safely.  Do  not  condemn  a  paper, 
or  a  magazine  for  unsatisfactory  results,  your  copy 


SCIENTIFIC  MANAGEMENT  29 

may  not  appeal,  or  probably  you  have  selected  the 
wrong  medium  for  exploiting  your  product. 

Keying  an  advertisement  determines  the  results, 
also  the  waste ;  the  latter  may  be  so  large  that  you  will 
be  compelled  to  discontinue  a  campaign  that  had  large 
possibilities. 

Before  employing  a  clerk  or  extending  credit,  you 
make  inquiries;  if  the  same  principle  were  followed 
before  making  advertising  contracts,  unworthy  me- 
diums would  soon  be  eliminated  as  well  as  those  that 
charge  exorbitant  rates  for  exaggerated  circulations. 

Scientific  Results. — Scientific  management  should 
not  end  with  manufacturing  and  distribution,  it  should 
be  accepted  and  practiced  by  the  retailer,  the  owner 
of  the  large  department  store,  or  the  little  store  around 
the  corner. 

The  number  of  recent  failures  among  department 
stores  makes  us  question  whether  they  had  been  con- 
ducted scientifically  or  not.  It  is  a  generally  conceded 
fact  that  only  five  per  cent  of  the  men  who  start  in 
business  for  themselves  actually  succeed.  Why  so 
small  a  percentage?  They  probably  lack  one  or  more 
of  the  essentials  necessary  to  success :  finances,  credit, 
knowledge  of  their  business,  ability,  health,  enthusiasm, 
attention  and  concentration,  fairness  of  mind,  sound 
judgment,  common  sense. 

Commune  with  yourself  and  try  to  pass  the  exam- 
ination in  each  of  these  essentials;  be  honest  with 
yourself,  endeavor  to  ascertain  your  weakness,  and  do 
everything  possible  to  improve  your  negative  qualities 
and  there  will  be  less  chance  of  failure. 

If  you  contemplate  becoming  an  employer,  you 
should  decide  whether  there  is  a  deficiency  in  any  direc- 


30  BUYING  BRAINS 

tion  that  would  make  success  impossible.  In  selecting 
a  location,  you  should  not  form  a  conclusion  from  a 
few  moments'  observation  by  watching  the  crowd  pass 
on  a  busy  day,  or  by  guess  work ;  you  should  study  the 
surrounding  stores  and  observe  the  class  of  patrons 
visiting  them  and  accurately  estimate  the  number  of 
possible  customers  passing  the  location  during  a  defi- 
nite and  extended  period. 

Too  much  thought  cannot  be  given  to  purchasing — 
you  must  be  fairly  conservative — remembering  the 
class  of  patrons  to  whom  you  are  catering.  Most 
buyers  do  not  realize  that  they  personally  cannot  con- 
sume every  article  purchased.  Retailers  who  visit  the 
wholesale  markets  often  do  so  without  plans  or  definite 
calculations  and  the  consequence  is  that  they  purchase 
too  large  a  quantity  of  certain  articles  while  in  other 
instances  they  are  too  conservative. 

The  improved  methods  of  accountancy  are  helpful 
in  scientific  management  as  they  enable  one  to  accu- 
rately compare  the  results  of  the  various  departments 
for  the  different  periods.  By  comparing  sales,  costs, 
profits,  expenses,  purchases,  etc.,  the  progress  and 
weakness  of  your  business  can  be  discovered. 

Do  not  attempt  to  deceive  or  excuse  yourself  on 
account  of  bad  luck  or  imaginary  conditions;  analyze 
your  shortcomings,  search  for  reasons,  and  the  results 
will  indicate  an  opportunity  for  improvement. 

Avoidance  of  Dull  Periods. — One  of  the  most  im- 
portant problems  for  scientific  management  to  remedy 
is  to  balance  the  business  of  a  year,  to  avoid  the  ex- 
cessive rushes  with  dull  periods  that  usually  follow. 
There  is  nothing  that  so  disorganizes  a  force  as  to 
dismiss  a  portion  of  the  employees  shortly  after  they 


SCIENTIFIC  MANAGEMENT  31 

have  labored  to  a  point  of  exhaustion.  In  the  rush 
season,  you  are  compelled  to  employ  additional  help, 
who  are  informed  by  the  other  employees  that  the 
employment  is  only  temporary,  and  naturally,  they 
become  indifferent  and  disinterested  in  the  welfare  of 
the  establishment.  In  the  dull  season  you  discharge 
employees  with  experience  who  cannot  be  replaced 
without  considerable  expense. 

The  department  stores  have,  to  some  extent  at  least, 
overcome  this  question  of  dull  seasons,  by  regularly 
inaugurating  the  furniture  and  household  sales  in  Feb- 
ruary and  August,  white  goods  sales  in  January  and 
clearance  sales  before  stock  taking. 

The  manufacturers  and  jobbers  are  in  some  in- 
stances adjusting  the  question  more  satisfactorily  but 
there  are  still  opportunities  for  improvement  in  this 
direction.  An  employee,  if  steadily  employed,  becomes 
more  efficient;  he  does  not  drift  from  one  trade  to 
another  and  would  prefer  less  wages  and  steady  em- 
ployment so  that  his  income  would  be  a  certainty 
throughout  the  year. 

Environment. — Too  much  attention  and  thought 
cannot  be  given  to  making  the  workrooms  light,  well 
ventilated  and  attractive  to  the  employees.  These  have 
an  important  influence  on  the  mind  and  will  repay  you 
for  your  efforts  by  increasing  the  quantity  and  improv- 
ing the  quality  of  the  work.  An  employee  who  finds 
the  workroom  more  attractive  than  the  home  would 
naturally  enjoy  working.  If  the  home  is  more  pleas- 
ant, he  will  dislike  the  workroom  and  will  be  anxious 
to  return  to  the  place  that  is  more  attractive. 

An  Understanding  of  Men. — Mr.  Osborne,  the 
employer,  before  becoming  a  Warden,  volunteered  to 


Z2  BUYING  BRAINS 

serve  as  a  prisoner,  asking  no  special  favors  to  be 
granted  to  him;  he  desired  an  opportunity  to  study 
the  weakness  from  the  inside  of  the  prison  system. 
In  a  speech  at  Chautauqua  he  said :  "This  experience 
had  been  helpful  to  him,  as  he  could  understand  the 
prisoners  better  by  associating  with  them,  and  that 
most  persons  have  a  mistaken  idea  regarding  them. 
The  prisoners  are  human  beings  like  all  of  us,  subject 
to  shortcomings  by  inheritance,  environment  and  lack 
of  training." 

Within  a  few  days  and  from  the  same  platform. 
Judge  William  L.  Ransom  stated,  in  part,  "We  have 
had  during  the  past  a  wrong  impression  of  our 
courts.  We  are  beginning  to  see  that  our  courts  are 
just  departments  of  government,  the  judges  are  se- 
lected from  the  people,  and  that  the  courts  are  to  be 
judged  by  the  same  standards  as  other  departments 
of  government." 

Upon  leaving  Chautauqua,  the  writer  had  a  pleas- 
ant discussion  along  these  lines  with  Judge  Ransom 
at  the  station,  which  was  followed  by  occupying  a 
seat  next  to  a  typical-looking  outdoor  laborer  who 
had  taken  the  wrong  train  to  Chicago.  During  the 
conversation  he  stated,  that  "He  worked  in  the  oil 
fields  of  California,  and  had  just  returned  from  a  trip 
to  England.  He  had  spent  his  savings  and  risked  his 
life  during  the  submarine  warfare,  to  visit  his  mother 
who  had  been  very  ill,  and  to  make  provision  for  his 
only  other  relative,  a  brother,  who  was  deaf  and  dumb. 

"He  thought  it  was  the  only  decent  thing  to  do  as  he 
might  never  see  his  mother  again,  and  he  wanted  to 
provide  for  his  brother,  as  the  same  affliction  might 
have  happened  to  him  instead  of  his  brother,     He 


SCIENTIFIC  MANAGEMENT  33 

was  returning  to  America  because  his  earning  was  far 
greater  in  this  country,  and  he  could  supply  them  with 
the  money  they  needed.  He  worked  twelve  hours  a 
day,  seven  days  a  week,  unless  there  was  a  'lay  off/ 
The  work  was  quite  a  distance  from  the  city ;  they  did 
not  have  theaters,  but  they  had  plenty  of  recreation 
and  the  Sunday  papers  were  received  from  Los 
Angeles  and  San  Francisco.  Most  of  the  men  would 
subscribe  for  a  few  magazines  and  would  then  ex- 
change them  among  each  other." 

He  spoke  intelligently  of  the  ownership  of  the  oil 
fields,  the  liquor  question,  the  reason  for  so  many  acci- 
dents and  his  last  words  before  parting  at  Buffalo 
were,  "You  cannot  do  too  much  for  your  parents, 
especially  your  mother." 

After  listening  to  these  three  remarkable  men,  War- 
den Osborne,  Judge  Ransom  and  this  oil  worker,  the 
natural  conclusion  was  that  we  make  a  grave  mistake 
in  thinking  some  men  less  human  and  others  more 
than  human.  When  we  meet  each  other  on  a  common 
footing,  neither  looking  upward  nor  downward,  but 
face  to  face  and  eye  to  eye,  we  shall  then  begin  to  un- 
derstand one  another.  This  lack  of  understanding  is 
one  of  the  causes  of  the  conflict  between  the  employer 
and  the  employee.  The  autocratic  employer  is  largely 
responsible  for  the  existing  condition;  as  soon  as  he 
becomes  more  democratic,  the  relationship  will  be 
improved. 

Testimony  Before  Industrial  Commission. — The 
testimony  of  Mr.  Andrew  Carnegie  before  the  Indus- 
trial Commission  was  quite  interesting,  when  he  in- 
cluded in  his  remarks,  that  "He  had  understood  his 
men  and  they  understood  him.    He  did  not  want  them 


34  BUYING  BRAINS 

to  mutter  'Here  comes  Mr.  Andrew  Carnegie/  but 
was  delighted  when  he  was  referred  to  as  'Andy.'  He 
Hkened  labor,  capital  and  business  as  a  three-legged 
stool,  'each  necessary  for  the  other  and  all  equal'  He 
was  glad  when  his  workmen  had  come  to  him  with 
their  grievances,  he  knew  that  they  would  always 
part  as  friends." 

Miss  Ida  Tarbell,  in  her  testimony  before  the  same 
Commission,  said :  "There  is  a  growing  feeling  going 
on  in  American  industry,  that  the  common  man  is 
worth  a  good  deal  more  than  any  employer  or  manager 
ever  dreamed.  There  is  an  increasing  desire  to  give 
him  full  justice  and  the  idea  is  steadily  at  work.  It  is 
coming  out  fundamentally  in  what  is  called  the  science 
of  management. 

"This  breaks  away  entirely  from  the  old  ideas.  It 
means  better  earnings,  shorter  hours,  and  most  im- 
portant of  all,  the  development  of  man  as  a  worker. 
One  reason  scientific  management  is  so  important  is 
that  it  requires  co-operation  and  concerted  action  to 
make  it  successful.  Under  it  every  man  must  be 
heard,  whether  his  complaint  is  silly  or  otherwise, 
either  as  an  individual,  or  through  his  representative." 

Miss  Tarbell  also  stated,  "She  had  seen  the  system 
at  work  in  a  half  dozen  big  factories,"  and  laid  stress 
upon  its  "power  to  push  men  out  of  their  ruts." 

Mr.  Frederick  W.  Taylor. — "System"  Magazine 
submitted  a  series  of  questions  to  workmen  in  various 
factories,  and  the  replies  indicated  that  95  per  cent, 
favored  scientific  management,  and  none  were  op- 
posed to  it,  yet  5  per  cent,  knew  nothing  about  it,  and 
yy  per  cent,  were  unacquainted  with  the  name  of 
Frederick  W.  Taylor. 


SCIENTIFIC  MANAGEMENT,  35 

A  German,  upon  coming  to  help  market  a  European 
product  in  this  country,  was  surprised  that  so  few 
Americans  knew  of  Mr.  Taylor,  who,  he  claimed,  was 
better  known  in  Germany  than  in  his  own  country. 
It  would  be  impossible  to  think  of  scientific  manage- 
ment without  associating  with  it  the  name  of  Fred- 
erick W.  Taylor. 

He  inaugurated  it,  struggled  for  it  and  through  his 
activity  and  guidance  has,  with  his  associates,  greatly 
assisted  hundreds  of  employers  and  thousands  of  em- 
ployees the  world  over. 

The  merits  and  advantages  of  scientific  management 
were  not  understood  by  many  until  a  few  years  before 
Mr.  Taylor  was  compelled  to  leave  his  magnificent 
work,  and  he,  like  many  of  our  great  writers  and 
artists,  will  be  better  appreciated  in  generations  to 
come. 


CHAPTER  II 
SERVICE 

Q ERVICE  is  the  keynote  to  success.  It  Is  impos- 
sible to  succeed  permanently  without  rendering  in- 
telligent and  profitable  service.  A  satisfactory  trans- 
action merits  continued  patronage,  without  which  no 
business  can  be  successful.  The  men  who  think  of 
their  individual  interests  exclusively,  and  do  not  con- 
sider the  welfare  of  their  patrons  may  have  a  tempo^ 
rary  success,  but  they  destroy  future  opportunities. 

It  has  been  concisely  stated  by  Madeline  Bridges, 
who  said,  "Give  to  the  world  the  best  you  have  and 
the  best  will  Ebme  back  to  voti  '* 
•  The  most  successful  men  in  every  locality  and  every 
industry  are  the  ones  who  have  served  the  best.  Ren- 
dering service  to  your  customers  is  the  start  of  an 
endless  chain.  Each  time  you  fail  to  serve  satisfac- 
torily means  a  break  in  the  chain. 

Marshall  Field  and  John  Wanamaker  have  been 
regarded  as  excellent  types  of  successful  merchants, 
neither  have  been  excelled  in  serving  their  patrons  in 
an  honorable  and  intelligent  manner. 

The  employers  who  first  inaugurated  the  "one-price" 
and  "money-back"  policies  became  the  most  successful 
in  their  communities.  The  "one-price"  system  meant 
a  fair  profit  and  equal  service  to  all — the  shrewd  buyer 
had  no  advantage  over  the  innocent  purchaser.  The 
"money-back"  agreement  inspired  confidence  and  the 
customer  was  not  compelled  to  keep  an  article  that 
was  unsatisfactory. 


SERVICE  Z7 

Abraham  Lincoln  said:  "You  cannot  fool  all  the 
people  all  the  time."  It  is  folly  to  attempt  to  fool  them 
at  any  time. 

During  the  period  of  depression  at  the  beginning  of 
191 5,  President  Wilson  delivered  a  message  to  the 
employer  which  should  be  observed  by  all.  He  said 
in  part :  "You  should  give  a  full  equivalent  in  service 
for  the  money  you  receive,  and  not  try  to  skimp  in  the 
service  to  increase  profits.  The  game  of  business  re- 
quires a  certain  kind  of  conscience  in  business.  The 
conscience  is  the  motive  spring  of  the  whole  thing — 
it  is  the  spirit  of  the  service  you  render — you  want 
to  see  that  the  thing  you  do  for  the  public  and  get 
money  for  is  the  best  of  the  kind  that  you  can  do." 
These  facts  should  always  be  remembered. 

Service  Rendered  by  Bankers. — The  Harriman 
National  Bank,  of  New  York,  inserted  an  advertise- 
ment with  the  heading,  "Co-operation  and  Service." 
It  read :  "Modern  business  sISccess  is  characterized  by 
co-operation  and  service.  These  two  things  animate 
the  policy  that  governs  the  Harriman  National  Bank. 
We  regard  our  business  as  that  of  a  merchant  dealing 
in  credit,  money  and  service  as  stock  in  trade.  The 
depositors  who  we  serve  are  on  a  basis  of  reciprocity." 

The  Bankers'  Trust  Company  made  a  similar  ap- 
peal in  an  advertisement  during  the  same  year.  With 
a  heading  of  only  the  word  "Service"  it  read  as  fol- 
lows: "Of  the  three  great  essentials,  strength,  organ- 
ization and  service  afforded  to  clients  by  this  Com- 
pany, service  is  not  the  least  important.  The  Com- 
pany's entire  organization  is  permeated  with  the  spirit 
of  service.  It  is  not  enough  to  accept  and  safeguard 
the  banking  and  trust  business  of  clients;  every  effort 


38  BUYING  BRAINS 

IS  put  forth  to  be  of  additional  active  service  within  the 
Company's  proper  sphere." 

These  banking  institutions  include  in  their  direc- 
torate some  of  the  most  successful  men  in  this  country, 
and  they  are  supporting  a  policy  which  made  it  pos- 
sible for  them  to  attain  their  present  position. 

Public  Service. — ^Until  recently  many  of  the  rail-, 
road  officials  have  catered  to  the  legislators  and  ignored  \ 
the  wishes  of  the  public,  who  were  compelled  to  con-  j 
tribute  to  the  support  of  the  companies,  but  the  offi-  / 
cials  are  beginning  to  realize  that  the  public  has  become/ 
more  enlightened. 

In  contrast  with  the  service  rendered  by  some  of 
the  companies  operating  near  New  York  is  the  man- 
agement of  the  McAdoo  system;  the  employees  are 
courteous,  the  service  is  intelligent,  and  the  comfort 
of  the  passengers  is  given  proper  consideration. 

On  the  morning  that  an  announced  change  was  to 
become  effective  in  regard  to  the  fares  and  the  pur- 
chase of  tickets,  officials  of  the  company  were  at  the 
various  stations  to  assist  the  employees  in  directing 
the  passengers  to  avoid  the  usual  confusion  which 
takes  place  when  similar  changes  are  made  on  many 
other  lines. 

Service  First. — The  United  Cigar  Stores  Company 
have  established  in  a  brief  period  a  chain  consisting  of 
hundreds  of  stores  scattered  from  coast  to  coast.  The 
founder  and  president  retired  and  placed  the  man- 
agement in  the  hands  of  the  men,  who,  he  states,  have 
co-operated  with  him  and  made  the  success  possible. 

The  rapid  growth  was  probably  due  to  a  combina- 
tion of  progressive  ideas,  but  the  slogan  they  adopted 
and  instilled  in  the  minds  of  employees  was  one  of 


I 


SERVICE  39 

the  important  factors  in  achieving  such  a  phenomenal 
success — "Service  First."  They  had  contests  of  dif- 
ferent kinds;  the  salesmen  were  encouraged  to  sell 
cigars  by  the  box  where  advisable,  but  were  impressed 
with  the  idea  that  at  no  time  should  they  increase 
business  at  the  expense  of  "service." 

Confidence  Established. — Why  do  Sears,  Roebuck 
&  Company  sell  annually  over  one  hundred  millions 
of  dollars  worth  of  merchandise?  Why  are  people 
compelled  to  judge  the  merchandise  from  photographs 
and  descriptions?  And  why  do  the  people  send  them 
money  in  advance  when  they  do  not  know  the  own- 
ers, and  have  never  even  viewed  the  establishment? 
Because  they  have  inspired  confidence  in  the  public 
by  their  performances,  and  with  a  liberal  policy  to 
refund  the  money  on  unsatisfactory  purchases  without 
any  expense  to  the  customer. 

Merchants  throughout  the  country  have  been  af- 
fected by  the  growth  of  the  mail-order  houses  and 
have  been  fighting  them  by  appealing  to  local  citizens 
for  their  assistance,  and  offering  excellent  reasons  why 
the  money  should  be  spent  where  it  is  earned.  Such 
arguments  for  patronage  have  not  brought  the  desired 
results.  Appeals  of  this  nature  are  considered  by  many 
as  an  acknowledgment  of  the  supremacy  of  the  mail- 
order house.  Does  the  retailer  patronize  a  distributor 
who  appeals  for  business  on  the  grounds  of  sympathy 
or  for  sentimental  reasons? 

The  local  merchants  should  have  competed  with  the 
mail-order  houses  by  giving  better  service,  and  by 
adopting  more  liberal  policies.  They  should  have  or- 
dered for  their  customers  any  article  desired  with  the 
distinct  understanding  that  the  article  would  not  be 


40  BUYING  BRAINS  ^ 

delivered  unless  it  was  entirely  satisfactory  when  seen 
in  the  store.  The  advantages  of  dealing  with  the  local 
merchants  are  many,  and  the  correct  appeals  should 
have  been  steadily  advertised  in  the  local  papers.  It 
is  a  waste  to  attract  patrons  unless  you  are  determined 
to  render  them  satisfactory  service. 

Truth  in  Business. — The  majority  of  successful 
concerns  have  been  materially  helped  by  advertising 
liberally.  The  opportunity  of  obtaining  a  large  vol- 
ume of  patronage  through  printer's  ink  has  not  only 
attracted  the  honest  merchants,  but  it  has  opened  new 
avenues  to  the  unscrupulous,  and  the  men  who  have 
continued  to  trade  as  was  customary  years  ago,  seek- 
ing to  obtain  as  high  a  price  as  possible,  handling  mer- 
chandise of  questionable  character,  believing  that  the 
purchasers  were  responsible  for  their  own  decisions. 

The  unworthy  advertiser  to  a  considerable  extent 
has  made  the  public  sceptical,  partly  destroying  its 
faith  in  advertisements.  It  is  generally  known  that 
the  honest  advertisers  are  judged  by  the  company  they 
keep  in  advertising  columns.  This  condition  was 
growing  worse  until  recent  years,  when  the  "truth 
in  business"  became  widespread.  This  was  largely  due 
to  the  efforts  of  the  Associated  Advertising  Clubs, 
who  have  adopted  the  word  "Truth"  as  their  standard. 

Local  advertising  clubs  include  not  only  men  who 
dispose  of  advertising,  but  number  among  their  mem- 
bers the  purchasers  of  advertising.  The  advertising 
clubs  have  been  instrumental  in  having  laws  enacted 
in  many  states  making  dishonest  advertising  and  mis- 
representations a  criminal  offense,  and  throughout  the 
country  they  have  advocated  and  improved  the  ethics 
of  business. 


SERVICE  41 

The  advertising  clubs  have  done  their  work  so  re- 
ligiously that  it  has  been  customary  during  the  past 
few  years  to  have  prominent  members  of  the  clubs 
occupy  the  pulpits  on  the  Sunday  preceding  their  an- 
nual convention. 

The  advertising  clubs  are  rendering  a  service  to  the 
public,  to  the  honorable  merchant,  to  the  press  and  to 
the  men  associated  with  advertising.  The  newspapers 
and  magazines  should  do  their  duty  and  fulfill  their 
responsibility  to  the  readers  by  rejecting  advertise- 
ments that  contain  untrue  statements,  or  offer  for  sale 
anything  that  will  not  give  satisfaction  to  the  pur- 
chaser. They  will  not  only  restore  the  confidence  of 
the  public,  but  will  assist  the  honest  advertisers,  who 
will  receive  better  results  and  make  larger  appropria- 
tions. This  will  naturally  offset  the  financial  loss 
caused  by  rejecting  unworthy  advertisements. 

A  publisher  has  no  more  right  to  offer  the  public 
a  dishonest  advertisement  than  a  merchant  to  offer 
merchandise  which  he  knows  will  not  give  satisfac- 
tion. The  endorsement  of  the  publisher,  or  the  mer- 
chant, helps  to  deceive  the  public  and  encourages  the 
unscrupulous  advertiser  and  manufacturer  to  continue 
their  sharp  practices. 

Honesty  is  the  Best  Policy. — ^Without  even  view- 
ing business  from  an  ethical  standpoint,  it  is  poor 
policy  not  to  render  satisfactory  service  to  your 
patrons.  The  successful  men  have  followed  the 
straightforward  path,  but  many  park  benches  are  oc- 
cupied by  shortsighted  men  who  had  excellent  oppor- 
tunities and  who  possessed  unusual  abilities.  They 
could  only  gauge  the  profits  of  to-day  and  could  not 
picture  the  prospects  of  to-morrow.     It  is  a  pitiful 


42  BUYING  BRAINS 

sight  to  meet  matured  men  who  in  their  prime  were 
connected  with  undertakings  that  were  profitable,  but 
did  not  give  satisfaction,  and  now  that  their  activities 
are  curtailed,  find  themselves  in  a  helpless  condition. 

If  you  are  engaged  in  a  business  that  does  not  merit 
future  patronage,  or  if  you  are  ashamed  to  meet  your 
former  patrons,  you  should  adjust  your  affairs  to 
change  the  policy  of  your  business,  or  enter  another 
field  that  makes  honest  methods  possible  and  profitable. 

"Get  Rich  Quick  Wallingfords"  are  quite  numerous 
in  the  larger  communities,  but  a  considerable  percent- 
age of  them  do  not  attain  the  coveted  goal.  They  have 
ability  in  abundance,  are  mentally  and  physically  in- 
dolent, and  do  not  possess  conscience;  they  destroy 
their  opportunities  and  waste  the  savings  of  those  who 
work  conscientiously.  In  the  end  they  have  nothing 
to  show  for  their  ill-gotten  gains. 

The  schemer,  the  promoter,  and  the  merchant  who 
handles  unsatisfactory  merchandise  attract  some  of  the 
most  clever  employees,  because  they  pay  the  largest 
commissions,  receiving  money  in  exchange  for  worth- 
less securities  and  articles,  but  in  the  aggregate  the 
employees  earn  less  than  they  would  if  they  had  de- 
voted their  time  to  honorable  business. 

The  service  rendered  by  employees  is  usually  the 
kind  of  service  that  the  employer  demands  for  his 
patrons.  It  is  just  as  easy  for  an  employee  to  be 
courteous,  to  be  truthful  and  fair,  if  the  employer 
wishes  him  to  act  in  such  a  manner;  if  the  employer 
considers  only  the  sales  and  the  profits  of  the  day,  the 
employee  will  use  his  efforts  to  enlarge  the  sales  and 
profits  without  consideration  of  the  customer. 

An  establishment,  like  the  individual,  has  good  and 


SERVICE  43 

bad  habits.  You  like  a  concern  the  same  as  you  are 
attracted  to  an  individual  for  his  personal  qualities. 
If  we  are  mistreated  or  deceived,  we  avoid  him  in  the 
future ;  if  an  old  friend  or  a  merchant  with  whom  we 
have  been  trading  for  a  number  of  years  makes  an 
unintentional  error  and  is  willing  to  rectify  it,  we  will 
naturally  excuse  him. 

Good  Will  of  a  Business. — **In  making  represen- 
tations to  your  customers,  never  lie,  for  a  lie  is  a  lia- 
bility, and  the  truth  is  an  asset/' — Hubbard. 

The  good  will  of  a  business  becomes  an  important 
question,  if  you  change  your  location,  or  if  you  desire 
to  dispose  of  your  business,  or  an  interest  to  your 
associates.  If  you  have  treated  your  patrons  fairly 
and  they  are  satisfied  with  your  service,  they  will 
follow  to  your  new  location  and  in  some  instances  at 
great  inconvenience.  If  you  desire  to  dispose  of  your 
business,  the  assets  are  worth  much  less  than  inventory 
if  there  is  no  good  will;  but  if  you  have  a  large  and 
satisfied  patronage,  your  business  may  be  worth  con- 
siderably more  than  the  amount  of  your  stock. 

Recently  a  small  stationery  store  with  a  newspaper 
route  was  sold  for  ten  thousand  dollars;  about  the 
same  time  another  store  with  stock  three  times  as  val- 
uable was  disposed  of  for  twenty-seven  hundred 
dollars. 

In  purchasing  the  good  will  of  a  business,  the  value 
of  the  good  will  is  affected  by  the  service  rendered  by 
the  successor.  Patrons  do  not  object  to  a  change  of 
management,  but  they  seriously  object  to  receiving 
inferior  service.  It  is  far  better  to  start  a  new  busi- 
ness in  a  new  location  than  to  succeed  a  merchant  who 
gave  unsatisfactory  service,  as  a  clean  record  is  better 


44  BUYING  BRAINS 

than  one  that  has  been  tarnished  by  the  acts  of  an  unfit 
predecessor. 

Your  Service  Affects  Others. — The  service  you 
render  not  only  affects  you,  but  often  has  an  indirect 
effect  on  others  in  the  same  city,  state  or  community. 
You  often  hear  of  a  state  being  favorably  known  for  its 
fruits  or  vegetables,  a  city  for  its  furniture  or  clothing, 
a  community  for  its  stores. 

Twenty-five  American  tourists  visited  Paris.  One 
of  them  purchased  an  article  in  a  small  shop  for  about 
five  dollars  that  had  been  originally  quoted  at  nearly 
twice  the  amount;  a  similar  article  was  seen  a  few 
moments  later  in  a  department  store  for  less  than 
three  dollars.  That  evening  the  story  was  related  at 
the  hotel,  and  the  entire  party  decided  to  confine  most 
of  their  purchases  to  the  department  stores.  The  un- 
fair method  of  one  dealer  affected  the  business  of  other 
merchants,  who  doubtless  deserved  a  share  of  the 
patronage. 

Intelligent  Service. — In  many  establishments  both 
employers  and  employees  aim  to  be  fair  and  honor- 
able, but  they  do  not  give  intelligent  service.  Money 
is  cheerfully  refunded  on  unsatisfactory  purchases; 
mistakes  are  rectified,  and  all  disputes  are  adjusted 
to  the  satisfaction  of  the  customer.  Patrons  appre- 
ciate a  satisfactory  adjustment,  but  what  they  prefer 
is  an  avoidance  of  the  mistakes.  Complaint  depart- 
ments should  have  a  two-fold  purpose — one  to  satisfy 
the  complainant  and  the  other  to  discover  and  remedy 
the  defects  of  the  business.  Complaints  should  be  tabu- 
lated and  the  errors  remedied  for  all  time ;  if  a  business 
continues  to  suffer  from  a  disease,  or  a  complication 
of  diseases  the  very  life  of  an  establishment  becomes 


SERVICE  45 

polluted  and  imperilled.  The  owner  of  a  department 
store  told  the  buyer  of  a  comparatively  new  depart- 
ment that  the  number  of  complaints  against  the  de- 
partment had  doubled  the  record  of  the  preceding  year. 
The  buyer  replied  that  the  volume  of  business  had  also 
been  doubled;  to  which  the  proprietor  answered  that 
he  would  prefer  less  business  and  fewer  complaints. 

The  Connecting  Links. — The  manufacturer,  job- 
ber and  retailer  are  connecting  links  in  serving  the  cus- 
tomer. If  any  one  of  the  three  does  not  measure  up 
to  its  responsibility  the  others  may  be  indirectly  af- 
fected. The  manufacturer  is  responsible  for  the  fin- 
ished article.  If  he  fails  to  make  the  product  what  it 
should  be,  or  misrepresents  it,  the  jobbers,  retailers 
and  consumers  are  all  losers  thereby.  The  jobber  is 
expected  to  be  more  of  an  expert  than  the  retailer, 
and  he  is  supposed  to  examine  and  detect  any  defect 
in  the  manufactured  article. 

Manufacturers  and  jobbers  are  beginning  to  follow 
the  example  of  the  reliable  retailers  in  offering  stand- 
ard merchandise,  and  assuring  the  merchant  of  satis- 
factory service.  They  are  not  seeking  sensational  sales- 
men who  are  capable  of  overloading  the  merchant,  but 
prefer  salesmen  who  are  consistent  workers ;  who  study 
the  needs  of  their  customers  and  sell  them  only  the 
articles  in  such  quantities  as  they  can  profitably  handle. 

The  salesman  who  serves  his  patrons  fairly  and  in- 
telligently serves  his  employer  best.  Just  as  the  re- 
tailer relies  on  the  better  judgment  of  the  jobber,  the 
consumer  places  confidence  in  the  retailer.  It  is  a 
foolish  policy  to  dispose  of  any  article  in  small  or 
large  quantities  that  will  not  give  entire  satisfaction 
to  the  purchaser. 


46  BUYING  BRAINS 

A  Permanent  Foundation. — If  you  have  made  a 
mistake  in  your  purchase,  it  is  far  better  to  take  a 
loss,  give  plausible  reasons  for  the  sacrifice  and  let  the 
purchaser  know  that  defects  exist.  This  kind  of  ser- 
vice means  pleasant  relationship  with  one  another,  also 
building  continuous  patronage  on  a  lasting  foundation. 

To  succeed  you  must  purchase  correctly.  There  is 
an  old  saying  that  "goods  well  bought  are  half  sold." 
The  other  half — the  selling — must  be  done  scientifi- 
cally. Fair  prices  are  also  necessary  to  success.  You 
may  deceive  a  customer  in  a  single  transaction  by  ob- 
taining an  unfair  profit,  but  he  will  eventaally  dis- 
cover his  mistake  and  patronize  others  in  the  future. 

Impression. — The  window  is  the  facial  expression 
of  a  store,  yet  merchants  who  shave  every  morning 
will  allow  their  windows  to  be  unwashed  for  a  week 
or  more ;  others  who  change  their  neckwear  daily  and 
their  suit  every  few  days,  permit  their  windows  to 
remain  unchanged  for  weeks,  and  when  they  are 
dressed  it  is  done  without  thought  or  planning  in 
advance. 

The  impression,  when  one  enters  a  store  should  be 
pleasing,  the  merchandise  well  displayed  and  the  prices 
fair.  The  clerk  should  express  the  individuality,  so  to 
speak,  of  a  worthy  employer.  He  should  be  intelli- 
gent, enthusiastic  and  willing;  he  should  wear  a  satis- 
fied look  and  try  to  please  both  the  customer  and  the 
employer.  Without  this  spirit  you  cannot  permanently 
succeed,  your  personal  ability  and  efforts  will  be 
wasted,  because  you  will  neglect  to  satisfy  the  em- 
ployee, and  without  his  co-operation  success  is  impos- 
sible. The  small  employer  with  a  big  policy  will  soon 
outgrow  his  quarters. 


SERVICE  47 

Indifferent  Service. — Salesmen,  both  retail  and 
wholesale,  frequently  neglect  to  properly  serve  the 
patrons.  It  is  much  easier  for  them  to  say — "I  am 
sorry,  we  do  not  have  it,"  than  to  exert  themselves  by 
showing  other  goods. 

A  Washington  department  store  inserted  a  little 
folder  in  the  pay  envelope  of  their  employees,  the  title 
page  reading  "Showing  Goods."  The  inside  read  as 
follows:  ''Don't  hesitate  to  show  goods.  Remember 
that  a  great  many  customers  have  not  decided  on  ex- 
actly what  they  want  when  they  come  to  your  depart- 
ment, and  part  of  your  value  to  the  house  depends  upon 
your  ability  to  serve  and  help  them  make  decisions. 
The  quickest  way  (most  often)  is  to  show  goods — 
all  they  want  to  see — make  them  feel  that  you  just 
delight  in  having  them  know  how  large  and  splendid 
a  stock  we  have — they'll  find  it  a  great  deal  easier  to 
buy  and  you'll  find  it  easier  to  sell. 

"One  of  the  best  things  a  woman  can  say  of  our 
store,  and  of  you,  is  *well,  they  are  certainly  willing 
to  show  goods.'  Even  if  she  does  not  buy  to-day,  she 
will  not  forget  your  willingness  to  'show'  her,  and 
some  day  she  will  come  back  to  have  you  'sell'  her. 
Show  goods." 

Discontented  Employers. — A  large  percentage  of 
employers  do  not  render  maximum  service  because 
they  have  become  dissatisfied  with  their  occupations, 
often  comparing  the  small  profits  and  disadvantages 
of  their  business  with  the  advantages  of  others.  The 
reason  for  this  conclusion  is,  that  they  only  under- 
stand the  other  occupation  from  an  outward  appear- 
ance, while  they  study  their  particular  field  of  en- 
deavor with  a  magnifying  glass,  learning  all  the  dis- 


48  BUYING  BRAINS 

advantages.  Do  not  consider  yourself  too  big  for  your 
business  until  you  become  a  leader  in  your  class, 
whether  it  is  shoe  polishing,  or  shoe  manufacturing. 
It  is  very  pleasant  to  be  able  to  serve  better  than  your 
competitors. 

Arthur  Frederick  Sheldon  says:  "He  who  serves 
best  profits  most." 


J 


CHAPTER  III 
EMPLOYMENT 

P^MPLOYING  desirable  help  is  probably  the  most 
"^  important  function  of  an  establishment,  yet  in 
many  concerns  very  little  attention  is  given  to  the  sub- 
ject. It  is  often  done  in  a  haphazard  manner;  em- 
ployees are  selected  hurriedly  and  are  not  suited  for  the 
positions,  while  others  are  turned  away  who  would 
have  become  valuable  assets  to  the  concern. 

Hiring. — Quite  frequently  the  employment  is  done 
by  various  members  of  a  firm,  or  by  the  heads  of  de- 
partments who  have  given  no  thought  to  the  employ- 
ment problem  '^scientifically," — and  the  employees 
include  every  possible  type.  Some  of  the  most  suc- 
cessful concerns  in  the  country  are  now  managed  by 
men  who  not  many  years  ago  were  employed  for 
unimportant  positions  in  the  same  establishments. 

Andrew  Carnegie  made  millionaires  out  of  men  who 
started  in  menial  positions,  and  who  afterwards  greatly 
assisted  him.  Charles  M.  Schwab,  one  of  them,  has 
followed  the  same  policy,  and  in  a  few  years  converted 
the  Bethlehem  Steel  Company,  which  was  a  financial 
wreck,  into  one  of  the  most  profitable  and  powerful 
concerns  in  the  world.  Mr.  Schwab  made  Mr.  Eugene 
Grace,  who  had  been  a  laborer  at  the  Bethlehem  Steel 
Company,  president  of  that  corporation  in  19 12  at  the 
age  of  thirty-five. 

Mr.  Schwab  claims  that  Mr.  Grace  is  the  greatest 
steel  man  in  the  country,  and  one  of  the  brightest  men 
in  the  world.     Marshall  Field  selected  partners  from 

49 


50  BUYING  BRAINS 

his  employees,  some  of  them  startiiig  in  small  positions. 

Selection  of  a  New  Employee. — Extreme  care 
should  be  exercised  in  the  selection  of  the  particular 
employee  for  each  position;  keep  an  accurate  knowl- 
edge and  record  of  them,  help  them  advance  and  you 
will  thus  be  able  to  develop  them  for  higher  positions. 
Less  time  and  thought  is  often  given  to  the  employ- 
ment of  a  twenty  dollar  clerk,  who  represents  an  an- 
nual investment  of  one  thousr.nd  dollars,  than  to  the 
purchase  of  an  inexpensive  article.  The  investment  in 
a  new  employee,  the  cost  of  his  hire  and  training,  and 
his  possibilities  should  be  given  greater  consideration. 

The  Employment  Manager. — In  every  concern, 
large  or  small,  the  employment  should  be  centralized 
and  done  by  an  individual,  or  through  a  department 
with  a  competent  employment  manager,  understanding 
vocational  guidance,  at  its  head. 

The  employment  manager  should  have  the  confi- 
dence and  support  of  the  chief  executive,  and  should 
select  only  such  types  of  employees  capable  and  will- 
ing to  co-operate,  in  maintaining  the  policy  of  the 
concern. 

The  employment  manager  should  be  thoroughly 
qualified  for  the  position  and  should  be  a  good  judge 
of  human  nature,  know  the  environment  and  require- 
ments of  the  various  positions  and  have  an  accurate 
knowledge  of  the  capabilities  of  the  employees.  He 
should  be  friendly  with  the  heads  of  the  departments 
and  exchange  information  regarding  various  em- 
ployees. He  should  treat  the  heads  fairly  and 
squarely,  also  see  that  justice  is  given  to  each  individ- 
ual. He  should  use  his  best  judgment  in  employing 
and  placing  the  employees ;  he  should  not  be  arbitrary. 


EMPLOYMENT  51 

but  recognize  and  rectify  his  own  mistakes.  In 
short,  he  should  be  diplomatic  and  wilHng  to  receive 
suggestions  from  the  heads  in  the  proper  spirit,  and 
his  actions  should  be  guided  by  the  thought  that  the 
employer  and  the  employee  should  be  fair  to  each 
other.  While  he  should  not  permit  his  sympathies 
for  the  employees  to  interfere  with  the  performance 
of  their  duties,  he  should  treat  the  employees  fairly, 
and  have  them  properly  regard  the  welfare  of  the 
employer. 

Must  Please  Both  Parties. — The  employment 
manager,  who  always  agrees  with  the  executive,  the 
members  of  a  firm  or  the  officers  of  a  corporation,  may 
please  them  personally,  but  he  will  fail  in  his  mission 
and  serve  them  poorly,  if  he  disregards  the  interests  of 
the  employees.  A  frequent  mistake  made  by  men  when 
they  become  employment  managers,  is  to  make  drastic 
changes  too  quickly  and  in  this  manner  disrupt  an 
organization.  It  is  far  better  to  go  slowly,  analyze  the 
industry,  the  requirements  of  the  various  positions  and 
the  capabilities  of  the  employees. 

The  employment  manager  should  maintain  an  open 
door  to  the  employees,  allowing  them  to  come  with 
their  disputes  and  grievances,  and  should  always  be 
willing  to  listen  and  adjust  any  differences  that  may 
arise.  In  every  establishment  there  is  occasional  fric- 
tion among  the  employees.  Petty  quarrels  that  can 
be  settled  in  a  few  moments  to  the  satisfaction  of  all 
concerned,  if  allowed  to  go  unsettled,  will  frequently 
extend  to  larger  proportions  and  be  detrimental  to  the 
establishment. 

It  is  not  uncommon  that  heads  of  departments  and 
employees  in  the  same  departments  become  angry  with 


52  BUYING  BRAINS 

each  other  and  not  on  speaking  terms  for  long  periods, 
preferring  to  neglect  their  duties  rather  than  aid  each 
other. 

If  an  employee  has  a  grievance  against  the  head  of 
a  department  or  the  concern,  it  is  better  to  allow  the 
employee  a  hearing;  if  the  complaint  is  justifiable  it 
should  be  remedied;  if  otherwise,  the  employee  should 
be  convinced  of  the  error.  By  extending  this  privi- 
lege you  keep  him  in  a  pleasant  frame  of  mind,  and 
may  detect  mistakes  in  management  and  be  frequently 
able  to  avoid  the  continuance  of  them. 

Spreading  the  "Good  Feeling"  Spirit. — In  meet- 
ing the  employees  personally  and  being  fair  to  them, 
you  not  only  have  the  advantage  of  coming  into  per- 
sonal contact  with  them  but  they  will  assist  you  in 
spreading  a  spirit  of  good  feeling  and  co-operation 
throughout  the  establishment. 

The  employment  manager  will  find  his  work  inter- 
esting and  enjoyable,  if  he  can  understand  the  em- 
ployees in  the  different  stations  of  life  and  can  make 
them  feel  comfortable  in  his  presence.  He  will  soon 
discover  that  the  average  employee  knows  more  than 
he  is  given  credit  for,  and  is  inclined  to  be  fair,  not 
only  to  the  other  employees,  but  to  his  employer. 

In  centralizing  the  employment,  you  relieve  the 
heads  of  departments  of  work  for  which  they  are  not 
mentally  equipped.  It  saves  their  time,  besides,  they 
individually  do  not  possess  the  facilities  for  making 
inquiries  regarding  references  and  similar  details. 

Filling  Vacancies. — A  knowledge  of  all  the  em- 
ployees is  vested  in  one  department,  under  the  super- 
vision of  the  employment  manager,  who  is  able  to'  fill 
vacancies  and  make  transfers  when  the  occasion  arises. 


I 


EMPLOYMENT  s^ 

Furthermore,  the  head  of  a  department  frequently  does 
not  Hke  to  admit  his  mistakes,  and  may  continue  the 
services  of  an  unfit  employee  if  employed  by  him, 
while  he  would  not  hesitate  to  inform  the  employment 
manager,  if  he  had  made  the  selection.  It  also  places 
the  employee  under  an  obligation  to  the  head  of  the 
department  who  may  act  in  an  independent  manner, 
believing  the  employees  in  his  department  would  sup- 
port him  in  any  disputes  with  the  management. 

The  employment  manager  should  realize  his  respon- 
sibility. He  may  select  the  future  executive  of  his 
own  concern,  or  he  may  reject  an  applicant  who  may 
assist  an  important  competitor.  He  plays  not  only 
an  important  part  in  the  results  of  to-day,  but  in  the 
future  of  his  employer;  he  should  employ  young  men 
who  will  be  capable  of  filling  the  higher  positions  in 
years  to  come. 

The  employment  manager  should  spend  a  portion 
of  his  time  visiting  the  different  departments,  which 
gives  him  an  opportunity  to  see  the  employees  at  work, 
as  well  as  obtain  a  personal  knowledge  of  the  require- 
ments for  vacancies  that  may  arise. 

It  should  be  his  duty  to  engage  help,  mostly  for  the 
lower  positions — the  higher  positions  should  be  re- 
served as  a  reward  to  the  employees  who  have  faith- 
fully performed  their  duties  in  the  past.  It  is  very 
discouraging  to  employees  who  have  patiently  waited 
for  promotion,  to  have  a  coveted  position  given  to  an 
outsider.  You  cannot  expect  conscientious  service  if 
your  employees  do  not  get  any  advancement,  or  if  they 
are  waiting  for  an  opportunity  to  work  for  a  com- 
petitor. Each  employee  should  be  given  the  highest 
position  he  is  capable  of  filling,  providing  suitable  va- 


54  BUYING  BRAINS 

cancies  occur.  An  employee  should  be  permitted  to 
ask  for  promotion;  they  usually  will  not  make  such 
request  unless  they  believe  they  are  capable  and  you 
have  the  opportunity  of  ascertaining  their  fitness,  at 
the  same  time  giving-  them  a  word  of  encouragement. 

Opportunity. — If  an  employee  is  given  a  position 
that  is  requested,  and  which  is  congenial,  he  will  en- 
deavor to  measure  up  to  the  responsibility  to  prove  his 
assertions  and  show  his  appreciation  for  the  chance 
given.  In  the  larger  concerns,  requisitions  for  em- 
ployees to  fill  vacancies  are  usually  sent  by  the  head 
of  the  department  to  the  employment  manager.  In 
the  smaller  establishments  the  vacancy  is  discussed  by 
the  two  personally.  In  many  instances  it  is  customary 
to  mention  the  number  of  employees  required  without 
giving  any  special  information  as  to  the  type  preferred, 
or  a  clear  understanding  as  to  the  duties  they  must 
perform ;  the  consequence  is,  that  the  employment  man- 
ager selects  applicants  without  much  thought  as  to 
their  fitness  for  the  positions  they  will  occupy. 

Scientific  Employment. — Under  scientific  manage- 
ment, where  the  records  of  individuals  are  kept,  it  is 
possible  to  determine  the  particular  type  of  employee 
who  obtains  the  best  results  in  the  performance  of  any 
given  task.  When  a  vacancy  occurs  the  first  thought 
should  be  of  advancing  an  employee  from  a  lower 
position,  and  if  possible,  promote  another  holding  a 
still  lower  position  to  the  one  made  vacant  by  the  ad- 
vancement. In  this  manner,  one  vacancy  causes  the 
promotion  of  several  employees  and  it  gives  encour- 
agement to  the  others,  and  at  the  same  time  has  a 
tendency  to  make  them  ambitious  and  eager  to  exert 
themselves  to  their  maximum  abilities. 


EMPLOYMENT  55 

It  is  much  easier  to  determine  the  fitness  of  an 
employee  for  a  position,  if  you  have  had  an  oppor- 
tunity to  study  him  in  another  position,  than  to  select 
an  individual  you  have  never  seen  at  work  and  who 
must  be  judged  by  his  claims,  his  record  in  the  em- 
ployment of  others  and  by  your  personal  observation 
of  a  few  moments. 

Proper  Fitness. — Each  employee  should  be  fitted 
for  the  particular  task  he  is  assigned  to  perform.  If 
he  is  not  capable  it  is  unsatisfactory  to  the  employer 
and  a  hardship  to  the  employee.  If  he  is  able  to  do 
better  work  than  that  given  him,  he  will  shortly  become 
dissatisfied  and  will  work  with  an  indifference  that 
will  lower  his  standard,  and  it  will  have  a  detrimental 
influence  on  the  other  employees  around  him.  A  man 
is  best  fitted  for  the  work  he  delights  in  and  loves.  A 
man's  love  for  his  position  is  half  the  battle  won. 

The  position  should  be  carefully  analyzed,  divided 
into  its  elements  and  a  conclusion  should  be  formed 
as  to  what  type  of  an  employee  can  best  perform  the 
work.  The  applicant  should  also  be  analyzed,  and 
should  possess  the  essential  qualities  and  experience 
required  to  fill  the  position  satisfactorily.  The  reason 
so  many  changes  in  employment  are  made  is  that  em- 
ployees are  engaged  to  do  work  for  which  they  are 
not  mentally  or  physically  fitted.  This  is  costly  to  the 
employer  as  well  as  to  the  employees.  The  employer 
by  making  constant  changes  has  the  additional  expense 
of  employing  and  training,  and  suffers  from  the  errors 
of  new  employees;  the  employee  loses  considerable 
time  in  looking  for  new  employment,  is  often  rejected 
if  he  has  held  too  many  positions,  and  wastes  the  time 
and  experience  gained  in  one  industry  when  he  enters 
another. 


56  BUYING  BRAINS 

A  great  many  persons  are  daily  performing  duties 
for  which  they  should  never  have  been  selected;  it  is 
pitiful  to  see  men  doing  physical  work  who  should 
be  doing  clerical  work  or  selling  and  a  great  many 
attempting  to  become  salesmen  who  would  make  far 
better  mechanics. 

Analyzing  the  Salesman. — If  you  want  to  hire  a 
salesman,  you  should  select  a  man  of  personality,  dig- 
nity, aggression,  determination,  aspirations,  a  good 
talker,  one  who  understands  a  variety  of  subjects,  a 
quick  thinker,  one  who  can  analyze  his  proposition, 
and  will  give  his  customer  and  his  firm  a  square  deal. 

A  partial  analysis  is  as  follows : — A  man  of  per- 
sonality is  one  Vv^ho  not  only  makes  a  presentable  ap- 
pearance, but  whose  whole  make  up  has  the  stamp  of 
character  and  ability  to  please.  For  determination, 
look  for  the  broad,  square  jaw,  or  the  high  top  head, 
which  is  an  indication  of  will  power.  For  one  with 
aspirations,  seek  ye  a  head  that  is  high  above  the  ears. 

A  good  talker  is  one  who  is  familiar  with  a  variety 
of  subjects.  For  one  who  can  analyze  his  proposi- 
tion, look  for  a  good  development  of  the  upper  central 
forehead. 

The  Normal  Individual. — This  will  furnish  you 
with  an  idea  of  how  some  of  the  different  characteris- 
tics work  out,  and  every  normal  individual  is  born 
with  a  number  of  mental  faculties,  some  of  which  are 
stronger  in  one  individual  than  in  another.  Every 
person  born  into  the  world  is  good  for  some  line  of 
work  and  can  perform  that  better  than  another,  be- 
cause he  may  have  been  bom  for  that  particular 
"niche"  or  vocation. 

Character  comes  from  two  sources.     First,  it  may 


I 


EMPLOYMENT  57 

be  a  native  or  hereditary  gift;  second,  it  may  result 
from  education  and  physical  development. 

Nature  gives  us  the  groundwork,  and  education 
develops,  directs  and  thereby  increases  the  powers  of 
our  natural  gifts. 

A  man  has  three  ways  of  showing  his  character: 
first,  what  he  thinks  he  is ;  second,  how  he  shows  him- 
self;  third,  what  he  really  is — and  it  never  fails,  "as 
a  man  thinketh,  so  he  is."  Emerson  said,  "Men  are 
to  me  what  they  are ;  they  wear  no  mask  with  me." 

In  some  of  our  institutions,  boys  and  girls  are  taught 
the  same  studies  and  trades  in  groups  irrespective  of 
their  individual  ambition,  ability  and  fitness;  the  con- 
sequence is  that  they  are  sent  out  into  the  commercial 
world  to  battle  with  the  wrong  ammunition. 

"The  Right  Man  in  the  Right  Place."— Young 
men  and  girls  often  fall  into,  or  obtain  their  first 
position  accidentally  and  without  thought  as  to  their 
adaptability,  and  if  they  are  misplaced  may  continue 
for  years,  failing  to  achieve  satisfactory  results. 

Vocational  study  is  not  only  helpful  to  an  employ- 
ment manager,  but  is  beneficial  to  the  hundreds  that 
may  be  employed  by  him.  An  employment  manager 
who  can  in  a  few  moments  "size  up"  and  determine 
the  physical  and  mental  weakness  and  strength  of  an 
applicant  renders  a  service  to  both  the  employer  and 
the  employee.  It  is  folly  to  condemn  an  employee  for 
poor  results  if  you  have  selected  him  to  do  work  that 
he  is  incapable  of  performing. 

There  is  a  place  for  every  man  and  a  man  for  every 
place.  You  cannot  be  expected  to  have  a  position  for 
each  applicant.  You  should,  however,  select  the  right 
person  for  each  position.    If  you  have  employees  who 


58  BUYING  BRAINS 

are  willing  and  ambitious  and  are  not  performing  their 
work  satisfactorily,  you  should  endeavor  to  transfer 
them  to  more  suitable  positions. 

Citation  of  Cases. — A  mechanic  working  for  a 
small  salary  was  discharged  for  talking  too  much. 
A  month  later  he  was  earning  more  than  double  his 
previous  salary  as  a  salesman  without  experience.  He 
was  capitalizing  his  talk! 

A  special  officer  in  a  small  theater  lost  his  position 
and  was  looking  for  a  similar  place,  as  he  had  done 
such  work  for  years.  He  pleaded  with  the  writer 
that  he  had  tried  a  number  of  places  without  success. 
He  was  told  that  "It  was  exceedingly  fortunate,  as  he 
was  above  his  work.  He  should  have  been  a  salesman, 
because  he  made  a  good  appearance  and  was  a  very 
convincing  talker." 

Six  months  later  the  writer  hardly  recognized  him 
when  he  saw  him.  He  had  taken  the  advice  and  had 
just  returned  from  a  successful  trip  and  his  only  re- 
gret was  that  some  one  had  not  put  him  on  the  right 
track  years  ago. 

On  the  "Right  Road." — The  employment  man- 
ager should  see  that  each  employee  is  on  the  right 
track.  Those  who  are  not  should  be  side-tracked. 
You  cannot  expect  the  employees  to  complete  their 
tasks  satisfactorily  and  on  time  otherwise. 

Each  employee  holding  an  important  position  should 
have  an  assistant,  or  there  should  be  one  who  is  ca- 
pable of  performing  his  duties  in  times  of  sickness,  or 
vacation,  or  in  case  he  should  leave  on  short  notice. 
An  employment  manager,  who  is  familiar  with  the 
requirements  of  the  various  positions  and  knows  the 
capabilities  of  the  employees,  has  no  cause  for  excite- 


EMPLOYMENT  59 

ment  in  times  of  emergencies.  A  captain  deserves  no 
special  credit  for  steering  a  ship  safely  in  clear  weather, 
but  if  he  is  calm  when  the  weather  is  rough,  is  worthy 
of  his  assignment. 

Tact  and  Talent. — Unusual  tact  is  required  by  an 
employment  manager  when  applicants  are  recom- 
mended by  the  officers  of  a  concern,  heads  of  depart- 
ments, customers  and  friends.  If  he  employs  them  he 
may  disrupt  a  department;  if  he  refuses  them  employ- 
ment he  may  cause  the  enmity  of  the  endorser.  In 
employing  help  under  such  circumstances,  extreme  care 
should  be  exercised  in  finding  a  suitable  position  for 
the  applicant  with  a  distinct  understanding  that  no 
special  favors  shall  be  granted.  If  such  an  employee 
is  not  satisfactory,  the  employment  manager  is  in  a 
worse  predicament  than  if  he  had  not  employed  him ;  it 
is  more  unpleasant  to  dismiss  an  employee  so  recom- 
mended than  to  have  rejected  his  application  originally. 
Unless  there  is  a  complete  understanding  at  the  time 
of  employment  the  employee  may  break  rules  and 
commit  objectionable  acts,  thinking  his  position  as- 
sured regardless  of  his  actions. 

A  favored  employee  has  a  demoralizing  influence 
on  others,  especially  if  he  is  advanced  on  recommen- 
dation of  the  endorser,  and  not  as  a  reward  for  effi- 
cient service;  it  is  discouraging  to  those  who  are  am- 
bitious to  prove  their  fitness  for  the  higher  position. 

Other  Methods. — When  employees  are  needed  to 
fill  vacancies  that  cannot  be  given  to  those  already 
employed  there  are  a  number  of  desirable  methods  of 
obtaining  them  which  depend  largely  upon  the  type 
of  workers  required  and  the  community  wherein  the 
concern  is  located. 


6o  BUYING  BRAINS 

Establishments  that  are  fair  to  the  employees  usu- 
ally have  a  waiting  list,  receiving  applications  from 
relatives  and  friends  of  the  employees ;  also  others  who 
quickly  learn  of  the  relationship  existing  between  the 
employer  and  the  employees. 

Such  concerns  attract  the  better  type  of  employees, 
who  on  account  of  their  ability  and  efficiency  can  be 
more  independent  and  particular  as  to  the  selection  of 
their  employer.  Firms  that  are  unfair  in  their  poli- 
cies soon  become  known  to  the  workers  in  an  indus- 
try or  community,  and  usually  receive  applications 
from  the  least  desirable  types,  who  find  it  impossible 
to  obtain  employment  with  the  more  favorably  known 
concerns. 

Applicants  recommended  by  other  employees  with 
whom  they  associate  can,  to  some  extent,  be  judged 
by  their  endorser;  ambitious,  sober,  and  industrious 
persons  usually  spend  their  evenings  with  others  of 
the  same  type.  Married  men  are  usually  steadier  and 
more  industrious  than  single  men,  as  they  realize  their 
responsibilities  and  are  willing  to  exert  themselves  to 
make  a  provision  for  those  dependent  upon  them. 
These  facts  are  worthy  of  serious  consideration. 

Young  men  affiliated  with  the  Young  Men's  Chris- 
tian Association,  churches,  gymnasiums,  and  similar 
organizations,  generally  lead  cleaner  and  more  regular 
lives  and  are  better  employees  than  those  who  spend 
their  evenings  on  the  comers  and  in  the  pool  rooms. 

Health  and  Habit. — While  we  sympathize  with 
those  who  do  not  possess  good  health,  it  is  a  necessary 
requirement  for  an  efficient  physical  or  mental  worker. 
In  rush  seasons,  when  the  employees  are  heavily  taxed, 
those  who  are  blessed  with  good  health  demonstrate 


EMPLOYMENT  6i 

their  superior  value  to  the  employer  and  show  more 
endurance. 

Modern  business  is  a  physical  strain  and  every  effort 
should  be  made  to  develop  one's  self  in  body  and  mind. 
Health  has  its  influence  on  the  mind  as  well  as  on  the 
body  and  perfect  health  is  the  proper  basis  for  right 
thinking.  It  gives  clean,  clear  thoughts  and  happy 
ones,  when  coupled  with  cheerfulness.  Right  thinking, 
deep  breathing  and  exercise  are  the  necessary  adjuncts 
to  every  individual  looking  for  success  in  the  world. 

Perfect  health  makes  for  power.  Power  gives  one 
the  opportunity  to  adjust  himself  to  things.  Power 
gives  one  the  ability  to  adapt  himself  to  any  situation. 

Employers  can  avoid  a  great  deal  of  sickness  by 
looking  after  the  welfare  of  their  employees  and  mak- 
ing the  office,  shop  or  factory  more  healthful  and  con- 
genial. If  they  would  but  look  into  the  question  of 
proper  sanitation  so  as  to  get  maximum  results  it 
would  automatically  revert  to  their  own  interests. 

Desirable  Applicants. — While  the  changing  of  po- 
sitions too  frequently  is  often  the  fault  of  the  em- 
ployers who  misplace  men,  it  is  far  safer  to  employ 
those  who  have  not  made  too  many  changes.  An  em- 
ployee who  brings  a  reference  of  long  standing  from 
his  former  employer  is  a  desirable  applicant.  Em- 
ployees can  be  instructed,  developed  and  improved,  but 
the  preference  should  be  given  to  those  who  have  a 
natural  ability  and  display  a  willingness  to  exert  them- 
selves. 

There  are  a  number  of  persons  who  are  chronic 
antagonizers  and  have  a  soured  disposition  written  on 
their  countenances ;  be  sure  to  avoid  them,  as  they  will 
destroy  the  usefulness  of  many  others. 


62  BUYING  BRAINS 

There  is  also  the  unreliable  class,  who  consider  their 
employment  secondary  to  their  pleasures  and  individ- 
ual comforts;  they  will  remain  away  for  the  slightest 
reason,  and  when  you  require  them  most  they  will  be 
at  home  with  a  headache  or  cold,  or,  possibly,  attend- 
ing a  baseball  game. 

The  employee  who  probably  causes  the  most  friction 
in  your  establishment  is  the  tricky  man;  the  one  who 
will  deny  anything  discreditable  and  be  willing  to  take 
the  credit  for  everything  that  proves  satisfactory.  He 
will  tell  you  falsehoods  about  himself  and  others  and 
for  a  brief  period  deceive  you  with  regularity.  Truth 
should  be  a  keynote  in  your  business. 

Personal  appearance  is  an  important  consideration 
when  the  employee  comes  into  contact  with  customers ; 
an  attractive  personality  is  a  valuable  asset.  A  person 
with  personal  magnetism  is  the  winner  of  the  day. 
A  number  of  positions  can  be  filled  by  male  or  female 
employees,  such  as  typewriting,  bookkeeping,  clerical 
work  and  filing.  If  the  position  does  not  afford  an 
opportunity  for  promotion  into  a  more  profitable  po- 
sition, it  is  advisable  to  employ  female  help,  as  young 
men  who  are  industrious  and  ambitious  will  become 
dissatisfied  more  quickly. 

A  great  many  employers  have  the  absurd  idea  that 
an  applicant  out  of  employment  is  unworthy.  Before 
passing  judgment  the  circumstances  should  be  well 
weighed.  Some  of  our  greatest  men  have  had  periods 
of  depression  and  disappointment. 

Your  Competitor. — An  employment  manager  de- 
serves no  special  credit  for  taking  an  employee  from 
a  competitor  by  offering  financial  inducements.  '  The 
employment  manager  who  can  discover  and  recognize 


EMPLOYMENT  6^ 

ability  under  any  condition  is  the  only  hope  of  those 
who  are  temporarily  embarrassed. 

Offering  a  position  that  is  out  of  proportion  to  the 
capability  of  an  applicant  may  relieve  him  of  financial 
distress,  but  he  will  hold  the  position  only  as  a  step- 
ping stone  to  secure  a  better  position  elsewhere. 

Policy. — National  and  religious  questions  should 
never  be  discussed  in  any  establishment,  as  they  are 
bound  to  cause  friction  and  cliques;  fanatics  should 
be  grouped  together  in  the  same  department  and  should 
work  under  heads  of  departments  who  are  in  sympathy 
with  them.  If  the  head  of  a  department  has  any 
prejudices,  after  investigating  the  situation  thoroughly, 
he  should  be  dismissed,  or  you  should  employ  under 
him  those  who  shall  be  given  a  fair  trial. 

Relatives  should  not  be  employed  in  the  same  depart- 
ment. They  cause  disputes,  cover  up  mistakes  of  one 
another  and  usually  leave  the  employment  at  the  same 
time.  Refined  and  coarse  types  should  not  be  grouped 
together;  it  is  far  better  to  have  all  of  one  class  de- 
pendent upon  the  requirement  of  the  work.  Persons 
of  refinement  cannot  be  expected  to  enjoy  their  work, 
or  be  satisfied,  if  they  are  continually  meeting  objec- 
tionable associates. 

Vulgar  employees  should  be  excluded  and  those 
leading  immoral  lives  should  not  be  employed  under 
any  circumstances.  They  frequently  influence  others 
who  have  come  to  you  in  the  hope  of  earning  an  hon- 
orable living.  It  is  your  duty  to  protect  your  em- 
ployees from  evil  temptations. 

Do  not  make  false  promises  to  applicants.  A  man 
out  of  employment  is  looking  for  a  position  and  it  is 
unfair  to   make   impossible  promises,    attempting  to 


64  BUYING  BRAINS 

deceive  him  and  obtain  his  services  for  less  than  his 
real  value.  Do  not  employ  temporary  workers,  giving 
them  the  belief  that  the  position  is  permanent.  If  they 
are  out  of  employment  it  is  unnecessary;  if  they  are 
working  you  have  no  right  to  employ  them  temporarily. 

Flowery  speeches  and  untrue  statements  may  secure 
the  services  of  an  applicant  at  your  own  figure,  but 
the  real  truth  will  be  revealed  within  one  week  after 
the  new  employee  is  in  your  establishment.  The  older 
employees  will  volunteer  to  furnish  the  inside  informa- 
tion and  he  will  soon  learn  whether  or  not  you  are 
truthful  and  fair. 

Obtaining  Help. — One  of  the  handicaps  in  secur- 
ing suitable  employees  is  that  the  heads  of  departments 
do  not  anticipate  their  wants.  They  will  order  mer- 
chandise and  other  supplies  in  advance,  but  they  will 
not  send  the  requisitions  for  additional  employees  until 
the  last  moment.  An  employment  manager  who  must 
select  employees  hurriedly  will  often  engage  one  of  a 
lower  caliber  than  he  would  if  sufficient  time  had  been 
allowed. 

In  securing  employees  when  there  is  no  waiting  list, 
it  is  customary  to  advertise  in  the  papers  or  communi- 
cate with  the  employment  agencies.  By  advertising 
you  will  probably  have  more  of  a  selection  of  suitable 
employees,  as  the  help  wanted  columns  are  not  only 
read  by  those  out  of  employment,  but  by  those  who 
are  dissatisfied,  or  ambitious  to  secure  better  positions. 
The  selection  is  of  vital  importance. 

Agencies  versus  Advertising. — Employment  agen- 
cies conducted  under  the  proper  ethics  can  save  con- 
siderable time  of  both  the  employer  and  the  applicant. 
They  can  be  helpfut  in  placing  the  right  man  in  the 


EMPLOYMENT  65 

right  position,  but  unfortunately,  the  ethical  agencies 
have  many  unworthy  competitors. 

In  the  smaller  communities  it  is  advisable  to  state 
in  your  advertisement  the  name  and  address  and  have 
the  applicants  call  personally.  In  larger  cities,  where 
the  distances  are  greater  and  the  number  who  respond 
too  numerous,  it  is  preferable  to  have  them  write,  an- 
swering your  advertisement  with  sufficient  particulars 
that  you  may  eliminate  those  who  for  some  reason  are 
unfit.  Your  advertisements  should  be  specific  as  to  the 
work,  compensation  and  requirements,  to  avoid  receiv- 
ing and  reading  applications  from  the  incapable, 
thereby  saving  the  time  and  expense  of  those  who  are 
out  of  employment.  Interviews  should  be  arranged 
so  that  applicants  are  not  compelled  to  wait  too  long, 
as  a  few  moments  may  cost  them  an  opportunity  else- 
where. 

Proper  Attitude. — Do  everything  possible  to  make 
the  applicant  comfortable  and  normal;  you  cannot 
judge  him  fairly  if  he  is  nervous  or  afraid  of  your 
personality.  Some  employment  managers  who  have 
the  natural  ability  and  are  of  a  sympathetic  nature 
make  the  applicants  feel  at  ease;  others  could  easily 
do  it  if  they  realized  the  importance  of  making  a 
proper  estimate  of  the  capabilities  of  the  applicant. 

While  it  is  impossible  to  employ  every  applicant,  it 
is  possible  that  every  caller  is  extended  the  proper 
courtesy.  It  is  discouraging  to  one  out  of  employment 
to  be  handled  in  a  rough,  impolite,  indifferent  manner 
when  he  is  trying  to  sell  his  services.  Quite  often  a 
smile,  an  encouraging  remark,  a  word  of  advice,  or  a 
suggestion  may  mean  much  to  the  applicant  who  is 
seeking  to  dispose  of  his  only  asset.    When  an  appli- 


66  BUYING  BRAINS 

cant  IS  interviewed,  a  number  of  pertinent  questions 
should  be  asked  regarding  his  past  experiences,  habits 
and  capabilities. 

Application  Blanks. — If  the  applicant  impresses 
you  favorably  he  should  then  be  given  an  application 
blank,  containing  spaces  for  his  name,  address,  age, 
married  or  single,  with  whom  he  resides,  names  and 
addresses  of  former  employers,  periods  of  employ- 
ment, the  reasons  for  leaving,  salary  received  and  ex- 
pected, personal  references  and  such  questions  in  ac- 
cordance with  the  requirements  of  the  position  and 
other  information  desired.  Some  of  the  larger  con- 
cerns make  a  mistake  by  having  a  uniform  blank  for 
all  employees.  They  should  have  several  forms  that 
vary  according  to  the  class  of  employees  required. 

After  reading  the  application  blank,  if  you  still 
think  favorably  of  the  applicant,  you  should  ask  such 
questions  as  will  relieve  you  of  any  doubt  as  to  the 
fitness  of  the  applicant  for  the  position.  Before  ac- 
cepting the  applicant,  it  is  well  to  ask  additional  ques- 
tions that  will  have  an  important  influence  on  him 
during  his  employment.  Such  questions  as  "Are  you 
always  on  time  in  the  morning?"  ''What  time  do  you 
retire  at  night  ?"  "Do  you  always  make  sure  you  are 
right  before  doing  anything?"  These  questions  when 
properly  asked  make  a  permanent  impression  and  often 
prove  valuable  suggestions  to  the  new  employees. 

The  references  received  and  letters  of  recommenda- 
tion are  sometimes  helpful  but  they  are  often  indefinite 
and  misleading.  Some  employers  believe  that  an  em- 
ployee should  receive  a  letter  of  recommendation,  un- 
less he  has  done  something  dishonorable  or  conspicu- 
ously bad;  other  employers  do  not  give  a  written  ref- 


EMPLOYMENT  67 

erence  except  upon  request  from  a  prospective  em- 
ployer. A  great  injustice  may  be  done  to  the  former 
employees  as  well  as  other  employers,  unless  complete 
records  are  maintained  of  the  employees  in  regard  to 
the  beginning  and  termination  of  employment,  the 
ability,  habits  and  conduct  during  employment.  While 
an  employer  should  be  willing  to  give  this  information 
in  a  confidential  manner,  he  should  be  perfectly  fair 
and  just  to  a  former  employee,  giving  him  the  benefit 
of  any  doubt  and  not  allowing  personal  prejudices  to 
become  a  barrier  and  prevent  a  former  employee  from 
securing  employment  under  possibly  better  and  fairer 
working  conditions.  When  considering  an  applicant 
for  an  important  position,  a  tactful  representative 
should  call  and  obtain  the  references,  as  employers 
will  often  furnish  information  that  they  would  hesitate 
to  write. 

It  is  unsatisfactory  to  employ  applicants  through 
correspondence  exclusively.  They  are  frequently  as- 
sisted in  their  writing  and  you  do  not  have  the  ad- 
vantages of  studying  an  applicant  that  a  personal  in- 
terview offers.  There  is  no  reason  for  employing  one 
in  this  manner  if  he  resides  in  the  same  community 
and  utmost  care  should  be  exercised  before  bringing 
one  from  another  city  as  a  moral  obligation  is  assumed 
and  the  services  of  one  may  be  obtained  who  is  not 
entirely  satisfactory. 

Bonding. — Many  of  the  larger  concerns  have  their 
employees  bonded,  especially  those  who  handle  money ; 
this  acts  as  a  safeguard  to  the  employer  and  has  a 
tendency  to  make  an  employee  more  careful  in  his 
accounts.  Bonding  companies  investigate  the  record 
of  an  applicant  more  carefully  than  the  average  em- 


68  BUYING  BRAINS 

ployer  and  their  request  for  references  are  usually 
given  greater  consideration.  Employees  know  when 
they  are  placed  under  a  bond  that  the  bonding  com- 
pany will  not  extend  any  sympathy  in  case  of  default 
and  it  has  a  good  moral  influence  over  those  who  might 
not  resist  a  temptation  otherwise. 

Discharge. — The  employment  manager  should  have 
the  power  of  discharge,  with  such  limitations  as  the 
circumstances  may  prescribe.  By  having  this  power 
it  gives  him  the  opportunity  of  making  transfers  when 
it  is  preferable. 

In  many  concerns  the  power  of  discharge  is  divided 
among  too  many  and  employees  are  dismissed  too 
hastily.  A  valued  employee  is  occasionally  discharged 
for  a  slight  offense  and  if  the  authority  was  vested  in 
an  individual  who  had  a  complete  record  of  the  em- 
ployee, he  would  not  have  dismissed  one  with  so  good 
a  record  unless  he  persisted  in  committing  an  inex- 
cusable act  after  being  warned.  In  discharging  an 
employee  needlessly,  an  injustice  is  not  only  done  him, 
but  it  is  very  costly  to  the  employer.  The  cost  of  em- 
ploying and  training  is  sacrificed  and  the  employee  you 
may  substitute  is  an  unknown  quantity  and  may  be  less 
valuable.  The  discharged  employee  is  humiliated,  suf- 
fers a  loss  while  out  of  employment  and  has  a  record 
which  may  interfere  with  his  obtaining  future  employ- 
ment. The  continual  change  of  help  not  only  has  a 
bad  influence  on  the  other  employees  but  when  new 
employees  discover  that  they  are  associated  with  others 
of  brief  employment,  they  assume  the  attitude  that  the 
position  is  probably  for  a  short  period  and  they  do 
not  take  their  work  seriously. 

Transfers. — Frequently  an  employee,  complained  of 


EMPLOYMENT  69 

by  the  head  of  a  department,  becomes  very  useful  and 
capable  if  transferred,  or  is  employed  under  another 
person  with  a  different  temperament  and  new  environ- 
ment. If  an  employee  is  discharged  after  receiving  his 
instructions  and  training,  there  is  a  total  loss  of  the 
investment  in  him;  if  he  can  be  transferred  there  is 
only  a  partial  loss,  as  the  information  gained  in  re- 
gard to  the  rules  and  policy  of  the  concern  is  retained. 

Irregular  Employment. — The  irregularity  of  em- 
ployment is  what  causes  many  workmen  considerable 
anxiety  and  loss  of  money.  Employees  are  often  com- 
pelled to  spend  their  full  earnings  for  their  mainte- 
nance and  when  unemployed  they  run  in  debt  or  live 
on  the  charity  of  others.  Looking  forward  to  a  period 
of  unemployment  naturally  worries  an  employee;  af- 
fects his  mental  and  physical  self  and  he  is  not  able 
to  give  his  best  efforts. 

According  to  the  census  of  19 10,  the  employees 
of  steel  works  and  rolling  mills  were  employed  75.8 
per  cent,  of  the  time;  foundry  and  machine  shops 
80.7,  while  many  of  the  other  important  industries 
averaged  about  90  per  cent. 

This  practice  means  additional  space  and  ma- 
chinery required  for  short  periods  and  the  employ- 
ment of  inexperienced  workmen.  Periodical  unem- 
ployment encourages  the  practice  of  shifting  from 
one  employer  to  another,  from  one  trade  to  another 
and  often  necessitates  going  from  one  community  to 
another. 

In  periods  of  depression  it  is  better  for  the  employer, 
employees  and  the  community,  if  the  men  are  em- 
ployed on  part  time  in  preference  to  dismissing  a  por- 
tion of  the  employees  entirely.    The  working  organ- 


yo  BUYING  BRAINS 

ization  is  kept  intact  and  the  employees  may  be  able 
to  decrease  their  expenses  temporarily,  and  then  they 
do  not  become  dependent  upon  the  public. 

Employment  Manager's  Test. — The  employment 
manager  can  test  his  own  ability  by  the  results  of  his 
work.  He  can  record  the  number  of  persons  em- 
ployed; the  percentage  that  have  proved  capable,  and 
the  reasons  that  others  have  failed.  Also  study  the 
types  who  do  the  best  work  in  the  various  positions. 
If  he  judges  fairly  he  can  discover  whether  the  fail- 
ure of  an  employee  was  due  to  his  error  of  judgment, 
or  the  conditions  which  confronted  the  employee.  Mis- 
takes should  be  signs  of  warning  in  making  future 
selections  and  unfair  conditions  should  be  quickly 
remedied. 


CHAPTER  IV 
INSTRUCTIONS 

IF  YOU  were  visiting  a  strange  city  and  desired  to 
see  the  places  of  interest  (without  having  previous 
instruction)  you  would  naturally  make  inquiries, 
which  would  necessitate  a  number  of  stops  and  prob- 
ably some  of  the  information  would  be  misleading. 
The  result  would  be  that  considerable  time  would  be 
wasted  and  likely  visiting  some  of  the  more  important 
places  would  be  neglected. 

Before  rnaking  the  trip  you  might  have  inquired 
from  a  friend  acquainted  in  that  city,  who  probably 
would  have  given  you  the  desired  information,  but  if 
you  had  received  the  correct  instructions  in  writing, 
to  which  you  could  have  referred  when  in  doubt,  you 
would  be  independent  of  others  and  able  to  visit  the 
places  of  interest  without  loss  of  time. 

It  is  practically  the  same  when  a  new  employee  en- 
ters an  establishment.  If  he  is  not  given  written  in- 
structions he  will  waste  time,  make  many  mistakes,  be 
dependent  upon  others  who  may  misdirect  him  and 
will  accomplish  little  with  a  great  expenditure  of  effort 
and  at  the  same  time  be  an  annoyance  to  others. 

If  he  is  told  of  the  rules  and  policies  of  the  concern, 
in  addition  to  the  method  of  performing  his  work  all 
at  one  time,  he  will  forget  part  of  his  instructions, 
become  confused,  make  mistakes  and  be  dependent 
upon  others.  But  if  the  instructions  are  written  he 
is  independent  of  others  and  can  refer  to  them  when 
in  doubt  and  devote  his  spare  time  to  studying  them. 

71 


72  BUYING  BRAINS 

Training  Employees. — One  of  the  greatest  assets 
to  any  concern  is  having  men  who  are  well  trained. 
The  success  of  an  estabHshment  depends  largely  upon 
the  training  of  its  employees.  When  the  men  have 
been  carefully  selected  for  positions  and  the  chances 
are  that  they  will  succeed,  you  can  afford  to  devote 
more  time  and  money  to  giving  them  the  proper  in- 
structions. 

It  is  far  better  to  have  a  new  employee  spend  a  week 
preparing  for  a  new  position  than  to  have  him  per- 
forming his  work  poorly  for  many  weeks.  A  new 
employee  must  receive  the  necessary  instructions  before 
he  starts  to  work  or  he  will  be  compelled  to  acquire  his 
information  gradually  by  making  inquiries,  or  being 
corrected  for  mistakes. 

Employees  are  frequently  criticised  and  often  dis- 
charged for  committing  offenses  when  they  were  doing 
what  they  considered  was  right.  An  average  employee 
cannot  be  expected  to  have  the  judgment  of  the  men 
who  make  the  rules,  but  each  employee  can  be  expected 
to  study  a  book  of  rules  and  act  accordingly.  This 
would  make  a  wide  awake  employee  more  proficient, 
and  he  would  commit  fewer  errors  and  omissions,  as 
well  as  require  less  supervision.  An  employee  is  more 
valuable  when  the  necessity  for  supervision  is  di- 
minished. 

Proper  Instructions. — In  our  large  department 
stores,  many  clerks  reply,  *1  don't  know,  but  I  will 
find  out  for  you,"  to  hundreds  of  questions,  and  the 
floorwalkers  are  continually  answering  the  same  ques- 
tions. If  the  necessary  information  had  been  furnished 
the  employees,  the  time  of  the  customer,  the  clerk  and 
the  floorwalker  would  have  been  saved. 


INSTRUCTIONS  73 

New  employees  should  be  properly  instructed  by 
persons  employed  for  that  purpose  and  not  by  those 
who  may  be  jealous  of  new  employees  or  who  may 
for  some  reason  take  a  dislike  to  them.  Employees 
receiving  the  same  instructions  from  a  competent  in- 
structor have  an  equal  and  a  fair  opportunity.  If  they 
fail  in  the  performance  of  their  work,  they  should  be 
corrected  and  shown  how  to  guard  against  a  similar 
occurrence. 

What  Others  Are  Doing. — The  telephone  com- 
pany, before  assigning  work  to  the  operators,  have 
them  instructed  and  they  must  be  capable  of  operating 
properly,  otherwise  it  would  be  impossible  for  them 
to  render  satisfactory  service.  The  United  Cigar 
Stores  Company  have  their  applicants  work  in  a 
demonstration  store  equipped  for  giving  instructions 
and  they  must  average  a  fixed  percentage  before  they 
are  permitted  to  become  a  clerk  in  one  of  their  stores. 

The  stenographers  of  a  large  automobile  concern 
were  shown  how  the  automobiles  were  constructed, 
so  that  they  would  become  familiar  with  the  technical 
terms,  which  would  enable  them  to  know  when  the 
thoughts  were  properly  expressed.  It  made  their  work 
easier  and  more  interesting  and  they  could  often  offer 
valuable  suggestions  to  the  salesmen.  You  would  not 
use  a  word  if  you  did  not  know  the  definition,  yet 
employees  are  often  expected  to  discuss  subjects  intel- 
ligently when  they  do  not  understand  thern. 

The  Old  Method. — Under  customary  management, 
a  new  employee  is  taken  to  the  head  of  a  department 
and  in  a  few  moments  is  told  what  is  expected  of  him, 
but  no  attempt  is  made  to  show  him  how  to  perform  his 
duties.    He  is  thus  placed  at  the  mercy  of  other  em- 


74  BUYING  BRAINS 

ployees  who  often  refuse  to  assist  him  if  he  is  too 
clever,  and  ridicule  him  if  he  is  inexperienced,  or 
stupid.  The  consequence  is  that  he  will  do  the  work 
as  he  was  accustomed  to  in  his  former  employment,  or 
will  imitate  one  of  the  other  employees  who  may  be 
inefficient.  The  result  is  that  employees  doing  exactly 
the  same  work  perform  the  task  in  a  number  of  differ- 
ent ways  and  those  who  have  equal  capacity,  if  prop- 
erly instructed,  will  vary  considerably  in  both  the 
quantity  and  quality  of  the  particular  character  of 
work. 

The  Scientific  Method. — The  methods  of  scientific 
management  are  extremely  helpful  to  a  new  employee. 
The  instructor  immediately  shows  him  the  best  known 
method  of  performing  his  task  and  he  is  able  to  begin 
work  with  the  same  knowledge  as  the  more  experienced 
employees,  is  able  to  concentrate  his  entire  attention 
by  following  instructions  definitely  and  in  a  short 
period  should  equal  the  capacity  of  the  others. 

In  every  field  of  endeavor,  we  should  accumulate 
the  knowledge  and  experience  that  has  preceded  and 
by  capitalizing  and  improving,  we  come  nearer  to  the 
goal  of  perfection. 

Planning. — It  is  natural  that  an  industry  having 
the  same  task  performed  daily  by  a  large  number  of 
employees  should  conduct  experiments  and  plan  to  do 
the  work  in  the  best  possible  manner  and,  having  dis- 
covered what  is  considered  the  correct  method,  the 
knowledge  should  be  imparted  to  each  individual  and 
the  analysis  and  synthesis  thoroughly  explained.  A 
planner  may,  in  a  few  days,  save  the  workmen  many 
days  of  unnecessary  labor  if  they  are  compelled  to  re- 
peat the  same  tasks  continually. 


INSTRUCTIONS  75 

Good  planners  are  not  always  satisfactory  instruc- 
tors. Spending  a  large  portion  of  their  time  thinking 
and  experimenting,  some  of  them  become  too  technical 
to  properly  explain  to  the  workmen  how  the  plans 
should  be  followed.  Planners  and  instructors  are 
often  regarded  as  non-producers.  If  they  are  efficient 
they  are  time-savers  and  great  profit  producers. 

The  experimental  work  is  done  by  those  mentally 
equipped  for  same  and  the  workmen  are  relieved  of 
that  responsibility.  In  scientific  management,  the  em- 
ployee will  enjoy  his  work  when  he  knows  he  is  doing 
it  correctly  and  will  appreciate  the  spirit  of  helpfulness 
derived  from  his  employer. 

Accomplishing  Results. — Workmen  can  often 
double  their  capacity  when  they  are  free  from  worry 
and  confident  that  their  work  is  being  performed  satis- 
factorily. A  competent  instructor  can  frequently  help 
an  individual  overcome  a  weakness  and  should  quickly 
discover  if  an  employee  is  not  fitted  for  his  task. 
Under  scientific  management  the  work  becomes  stand- 
ardized and  the  product  being  made  in  the  same  man- 
ner becomes  a  standard  product. 

In  addition  to  a  demonstration,  instructions  should 
be  furnished  in  printed  form.  This  enables  one  who 
is  ambitious  to  study  at  home,  or  refer  to  them  when 
in  doubt. 

The  chief  objection  to  verbal  instructions  is  that  in 
repeating  the  orders  from  the  executive  or  planner  to 
the  workmen,  they  are  finally  given  in  an  entirely 
changed  form  from  that  which  was  originally  intended. 
Employees  should  be  convinced  that  the  instructions 
are  meant  to  be  helpful  and  are  not  intended  to  deprive 
them  of  their  former  privilege  but  comprise  a  co- 


76  BUYING  BRAINS 

operative  plan  to  make  them  more  valuable  employees 
— and  they  should  be  fairly  rewarded  for  their  co- 
operation. 

A  Suggestion. — The  best  method  of  to-day  does 
not  indicate  that  it  should  he  the  approved  plan  of  to- 
morrow. Employees  performing  a  task  should  be  en- 
couraged to  make  suggestions  which  should  be  grate- 
fully received,  and  if  possessed  of  any  merit,  should 
be  tested  by  the  planners  and  a  suitable  bonus  given 
to  the  one  suggesting  same. 

Thirty  Per  Cent.  Increase. — The  average  workman 
does  not  realize  his  productive  capacity  and  is  usually 
unable  to  measure  how  much  real  work  can  be  accom- 
plished during  a  day.  It  has  been  proved  in  many 
manufacturing  concerns  that  under  ordinary  condi- 
tions, the  average  employee's  capacity  is  only  60  per 
cent,  productive.  Under  scientific  management  this 
can  be  increased  by  30  per  cent. 

Scientific  management  not  only  furnishes  a  work- 
man with  the  necessary  instructions  but  also  informs 
him  as  to  the  time  allotted  for  performing  a  specific 
task.  Under  customary  management,  the  head  of  a 
department  is  occupied  with  the  more  important  func- 
tions and  cannot  have  a  correct  knowledge  of  what 
the  employees  in  his  department  can  do,  or  are  accom- 
plishing. A  number  of  workmen  will  take  advantage 
of  this.  Others  often  assume  the  attitude  that  it  does 
not  pay  to  be  conscientious,  as  the  head  of  a  department 
does  not  give  them  credit  for  doing  more  than  others 
who  earn  the  same  wages. 

Employees  should  not  only  be  instructed  but  their 
work  should  be  accurately  measured  and  a  proportion- 
ate reward  should  be  given  those  who  follow  the  in- 


INSTRUCTIONS  ^7 

structions  and  achieve  satisfactory  results.  Scientific 
management  does  not  aim  to  cause  overwork,  but  it 
calls  for  instructions  that  will  eliminate  needless  mo- 
tions and  wasted  efforts;  its  object  is  to  increase  pro- 
duction without  an  unfair  increase  of  energy.  The  ma- 
jority of  workmen  approve  of  instructions  that  will 
increase  their  capacity  if  they  are  able  to  earn  higher 
wages. 

In  any  employment,  the  employee  deserves  the 
knowledge  and  information  that  has  been  accumulated, 
which  can  assist  him  in  higher  achievement.  By  fur- 
nishing the  employee  with  this  information  you  make 
him  a  more  intelligent  workman  and  consequently, 
will  be  well  repaid  by  obtaining  from  him  maximum 
results. 

After  an  applicant  is  employed  you  should  give  him 
such  instructions  as  will  assist  him  in  solving  future 
problems.  The  difficult  situations  should  be  antici- 
pated and  he  should  be  given  directions  that  will  enable 
him  to  render  decisions  and  guide  him  in  his  actions. 
While  occasionally  there  are  new  experiences  in  every 
establishment,  most  of  the  occurrences  are  a  repetition 
of  what  has  happened  before  and  you  should  capitalize 
previous  experiences  and  avoid  the  repetition  of  past 
mistakes. 

Other  Policies. — The  book  of  rules  furnished  by 
Marshall  Field  &  Company  to  the  employees  has  often 
been  referred  to  as  an  exceptional  example  of  how  the 
employee  should  be  properly  instructed.  Instructions 
of  that  character  mean  uniform  service  throughout  an 
establishment;  the  value  of  the  employee  is  largely 
dependent  upon  how  well  he  follows  the  instructions. 

The  Marshall  Field  book  of  rules  impresses  upon 


78  BUYING  BRAINS 

the  employees  how  they  should  address  the  patrons, 
how  to  be  courteous,  how  to  adjust  any  differences, 
the  proper  attitude  toward  their  fellow-workers,  the 
correct  attire  and  hundreds  of  important  questions  an- 
swered. Determining  a  policy  counts  for  very  little 
unless  the  employees  are  instructed  and  made  to  under- 
stand it;  the  store  is  not  judged  by  the  intention  of  the 
executive  but  by  the  actions  of  the  employees. 

You  can  visit  a  United  Cigar  Store  in  any  part  of 
the  country  and  you  will  face  the  clean,  tidy  clerk  who 
will  greet  you  pleasantly;  he  will  be  courteous  and 
thank  you  for  your  purchase.  He  will  not  discuss 
politics  with  you  nor  will  he  encourage  you  to  pay  a 
social  visit  in  order  that  he  may  have  a  gathering  as 
was  customary  in  the  average  old-fashioned  cigar 
store. 

This  uniformity  of  service  is  not  because  they  have 
selected  only  individuals  of  the  same  inclinations  but 
is  the  result  of  having  supplied  the  new  employees  with 
a  book  of  instructions,  and  insisted  upon  a  strict  obedi- 
ence of  the  rules  outlined. 

In  many  well-regulated  concerns  each  new  employee 
is  requested  to  place  his  signature  on  the  dotted  line  of 
a  "Rules  and  Regulations"  book  and  is  given  ample 
time  to  read  it  carefully  before  affixing  his  signature. 

A  Side  Light. — A  new  employee  working  in  a  de- 
partment store  with  an  unusual  reputation  for  re- 
liability made  a  sales  record  surpassing  all  the  older 
employees  in  his  department  for  daily  sales.  He  had 
not  been  instructed  otherwise  and  was  telling  patrons 
of  reductions  that  had  never  been  made.  They  pur- 
chased liberally,  not  questioning  the  salesman'^  ve- 
racity.    He  was  securing  increased  patronage  at  the 


INSTRUCTIONS  79 

expense  of  the  policy  and  the  reputation  that  had  made 
the  store's  success  possible. 

Necessary  Instructions. — Both  retail  and  whole- 
sale salesmen  are  often  expected  to  dispose  of  articles 
which  they  know  less  about  than  do  many  of  the  cus- 
tomers. They  are  given  articles  to  sell  but  receive  no 
instructions  as  to  how  they  are  manufactured  or  for 
what  uses  they  are  intended. 

It  is  embarrassing  at  times  to  the  salesmen  and  the 
loss  of  many  sales  is  the  result  of  this  lack  of  knowl- 
edge. Salesmen  often  reply  in  the  affirmative  or  nega- 
tive rather  than  admit  their  ignorance  and  reluctantly 
misrepresent.  Clerks  are  employed  without  experience 
and  are  transferred  from  one  department  to  another 
and  no  information  or  instruction  given  them  as  to  the 
merchandise  they  are  expected  to  sell. 

If  an  employee  is  hired  to  sell  gloves,  shoes,  hosiery, 
or  millinery,  there  is  general  information  that  should 
be  available  and  each  employee  should  receive  instruc- 
tions as  to  the  intent  of  the  articles  they  are  handling 
and  how  to  sell  them  and  above  all,  to  satisfy  patrons. 

New  employees  fail  continually  and  they  drift  from 
store  to  store  and  department  to  department  without 
gaining  real  knowledge,  and  after  years  of  unpleasant 
experiences  they  remain  unthinking  and  unknowing 
employees. 

The  buyer  of  a  department  frequently  receives  as 
large  a  salary  as  that  earned  by  several  clerks.  He 
should  not  alone  purchase  the  merchandise  but  also 
impart  some  of  his  superior  knowledge  to  the  clerks. 

The  Smaller  Shops. — Many  persons  prefer  patron- 
izing the  smaller  shops  to  the  department  stores  be- 
cause they  usually  receive  more  intelligent  service  from 


8o  BUYING  BRAINS 

the  proprietor  or  his  clerks.  In  these,  the  proprietor 
often  confides  in  his  employees ;  is  surrounded  by  them 
when  he  makes  his  purchases,  and  while  their  informa- 
tion is  gradually  collected,  it  is  superior  to  the  knowl- 
edge gained  from  the  department  store  clerk  who  often 
is  not  supposed  to  know  anything  except  the  price  of 
the  article. 

The  Salesmen. — The  average  wholesale  salesman  is 
better  informed  than  the  average  retail  salesman,  but 
instead  of  selling  the  consumer,  is  meeting  the  retailer, 
who  possesses  greater  knowledge  than  the  consumer, 
and  is  expected  to  have  technical  information  which 
should  materially  assist  the  retailer. 

The  customary  plan  is  to  furnish  the  set  of  samples 
and  a  price  list  and  satisfactory  results  are  expected. 
The  outside  salesman  is  practically  "his  own  boss" 
and  his  own  teacher.  For  years  he  continues  to  waste 
time,  efforts  and  opportunities,  believing  he  had 
adopted  the  correct  method  of  selling. 

Often  no  attempt  has  been  made  to  instruct  him  in 
the  art  of  selling.  No  suggestions  have  been  given 
him  as  to  planning  his  daily  or  season's  programme  and 
no  information  supplied  him  in  regard  to  the  mer- 
chandise he  is  handling. 

The  prospective  purchasers  are  the  only  persons  who 
listen  to  him  trying  to  dispose  of  his  product.  He  has 
no  knowledge  of  the  methods  adopted  by  other  sales- 
men and  for  a  long  period  continues  to  repeat  the 
same  blunders.  Salesmen  representing  the  same  con- 
cerns and  visiting  similar  trade,  vary  in  their  sales  to 
such  an  extent  that  it  is  not  unusual  to  have  one  repre- 
sentative sell  more  than  three  or  four  others  com- 
bined.   It  is  often  stated  that  salesmen  are  born  and 


INSTRUCTIONS  8i 

cannot  be  made — but  they  certainly  can  be  improved. 

The  Sales  Manager. — Frequently  a  successful 
salesman  becomes  a  sales  manager  and  has  charge  of 
many  salesmen.  He  criticises  them  for  their  poor 
showing  instead  of  outlining  for  them  better  methods. 
Why  not  accumulate  his  experiences  and  give  the  sales- 
men the  benefit  of  it?  Why  not  explain  how  he  made 
a  success ;  tell  them  how  to  arrange  a  programme  for 
each  day,  how  to  approach  a  prospective  customer  and 
show  his  samples,  analyze  his  proposition,  appeal  to 
the  customers  and,  in  proper  manner,  close  a  sale. 

The  sales  manager  should  furnish  detailed  infor- 
mation regarding  the  merchandise.  Explain  why  one 
article  costs  more  than  another.  Compare  the  product 
with  that  of  competitors  so  that  your  representatives 
may  successfully  overcome  competition. 

Your  salesmen  should  represent  you  intelligently. 
Let  them  meet  your  prospective  customers  with  a  su- 
perior knowledge,  give  them  the  necessary  confidence 
in  themselves  and  their  firm  and  the  customers  will 
respect  and  be  glad  to  meet  them. 

Some  of  the  most  successful  concerns  have  con- 
ducted schools  for  their  salesmen  and  have  them  visit 
the  factories  at  regular  periods.  They  have  continued 
the  practice  for  many  years  and  in  the  meantime  the 
industries  have  grown  larger  and  the  employees  have 
become  more  efficient.  You  should  assemble  the  repre- 
sentatives and  have  the  most  successful  salesmen  in 
the  various  branches  inform  the  others  how  the  results 
had  been  accomplished.  You  would  then  establish  a 
clearing  house  for  the  best  ideas  and  raise  the  effi- 
ciency of  each  individual. 

Generalities. — Each  employee  in  every  position,  no 


82  BUYING  BRAINS 

matter  how  simple  the  task  may  be,  should  have  a 
fair  start  and  not  be  handicapped  by  lack  of  knowledge. 
You  would  not  engage  a  lawyer  who  had  not  received 
his  legal  training.  You  would  not  send  for  a  physi- 
cian who  had  not  obtained  medical  instruction.  You 
would  not  have  a  tooth  extracted  unless  the  dentist 
had  his  diploma,  but  employers  continue  to  have  em- 
ployees represent  them  without  training  or  instructions. 
You  must  not  only  employ  the  correct  type  of  em- 
ployees and  place  them  in  the  proper  positions  but 
you  should  have  them  start  with  the  required  instruc- 
tions. A  proper  start  makes  the  right  finish. 


CHAPTER  V 
DEVELOPMENT 

AFTER  having  carefully  selected  the  employees  for 
the  various  positions  and  furnished  them  with 
proper  instructions,  the  next  step  is  an  important  one — 
the  development  of  the  employees.  You  should  not 
only  develop  them  so  that  they  are  capable  of  filling 
their  present  positions  but  they  should  be  further  de- 
veloped so  that  they  may  occupy  higher  positions  at 
a  future  time. 

A  successful  man  stated  that  he  would  prefer  his 
son  to  be  employed  by  a  certain  employer  without  com- 
pensation rather  than  receive  a  high  wage  working 
elsewhere. 

The  Start. — In  many  instances,  it  is  far  better  to 
have  a  child  work  for  inadequate  reward  under  proper 
management  to  gain  the  right  kind  of  training.  The 
first  lessons  in  business  have  an  important  effect  on  a 
young  man's  actions  in  life.  Getting  a  good  start  in 
business  is  very  helpful  in  shaping  the  character,  habits 
and  ideals  of  the  individual. 

This  is  only  one  of  the  reasons  why  it  is  an  advan- 
tage to  a  concern  to  start  its  future  executives  at  the 
bottom;  give  them  the  proper  training,  inculcate  in 
them  the  highest  ideals  and  make  them  fitted  for  higher 
positions.  When  you  are  looking  for  an  executive, 
instead  of  employing  one  trained  by  your  competitor 
whose  ideals  and  poHcies  are  different,  it  is  far  better 
to  promote  one  from  your  own  commercial  family. 


84  BUYING  BRAINS 

Fver}'  employer  who  selects  the  right  type  of  young 
men  and  helps  them  develop  intelligently  should  have 
available  material  for  higher  positions. 

Promotion. — This  method  of  promotion  encour- 
ages the  employees  to  look  into  the  future  with  a  hope 
of  obtaining  a  higher  position  and  it  usually  does  much 
good  towards  developing  the  employee  and  bringing 
out  the  best  that  is  in  him. 

The  same  employee  will  produce  different  results 
under  various  employers.  Quite  frequently  the  em- 
ployee will  increase  both  the  quantity  and  quality  of 
his  work  under  different  men  in  the  same  establish- 
ment. There  is  a  science  in  handling  employees  and 
no  stereotyped  method  is  successful,  because  each  in- 
dividual should  be  treated  according  to  his  particular 
traits  and  adaptability.  It  is  impossible  to  develop 
employees  to  their  maximum  ability  unless  they  are 
convinced  of  your  interest  in  them  and  your  sincerity 
and  fairness.  When  they  like  you  personally,  they  will 
endeavor  to  please  you  by  following  your  instructions 
and  prove  that  they  are  deserving  of  the  interest  you 
take  in  them. 

Study  of  Help. — ^You  should  be  tactful  in  talking 
to  employees.  Do  not  disregard  their  feelings  by  tak- 
ing advantage  of  the  higher  position  you  may  occupy. 
If  you  make  a  study  of  your  employees  and  understand 
them,  you  will  discover  that  it  will  be  helpful  to  them 
and  profitable  for  you. 

You  should  be  truthful  to  your  employees,  making 
only  such  promises  that  you  will  be  able  to  fulfill.  A 
promise  to  them  should  have  the  same  consideration  as 
any  contract  you  sign.  You  cannot  expect  the  em- 
ployees to  have  confidence  in  you  and  believe  what  you 


DEVELOPMENT  85 

say  if  you  have  an  established  reputation  for  breaking 
promises. 

Encouragement. — Employees  should  be  encour- 
aged to  think  about  their  work.  If  they  acquire  this 
habit  they  will  at  some  future  time  think  correctly, 
will  be  helpful  to  your  organization  and  a  credit  to 
you  and  themselves.  Do  not  regard  your  employees 
as  inferior  persons ;  instead  of  ridiculing  them  for  their 
shortcomings,  which  are  probably  due  to  a  lack  of 
training  or  proper  environment,  you  should  sympathize 
with  them  and  help  overcome  their  weaknesses. 

This  is  not  philanthropy,  it  is  a  good  business  policy. 
The  same  traits  and  habits  cannot  be  expected  of  em- 
ployees in  their  various  stations  but  their  ability  can 
be  improved  to  some  extent,  whatever  it  may  be. 

Latent  Powers. — Thexe  is  hardly  a  normal  person 
— regardless  of  the  type — who  cannot  be  stimulated 
if  the  proper  appeal  is  made  to  him.  Many  a  man  has 
risen  to  a  high  position  just  because  his  employer  was 
good  enough  to  awaken  him  to  the  discovery  that  his 
latent  powers  were  lying  dormant.  Do  not  attempt 
to  develop  your  employees  with  an  iron  hand  because 
they  will  only  please  you  on  the  surface  but  at  the 
critical  moment  will  disregard  you  and  your  interests. 

You  cannot  expect  to  develop  your  employees,  if 
you  lack  faith  and  the  essentials  to  develop  yourself. 
The  ideals  of  the  employees  are  seldom  higher  than 
that  of  the  management.  Raise  your  own  ideals  and 
you  will  help  elevate  those  of  the  employees.  If  you 
are  careless  and  indifferent,  or  if  you  do  not  serve 
your  patrons  honorably  and  intelligently,  you  cannot 
hope  to  have  your  employees  do  otherwise. 

High  Standards  and  Ideals. — The  example  you  set 


86  BUYING  BRAINS 

for  the  employees  should  be  of  high  standard  and 
ideals  that  will  be  an  inspiration  to  them.  A  number 
of  employees  regard  their  employer  as  their  ideal  and 
attempt  to  imitate  and  interpret  his  many  acts.  The 
younger  employees  especially  think  what  the  employer 
does  is  proper,  and  are  greatly  influenced  by  his  ex- 
ample. Older  employees  often  follow  the  fashion  of 
the  employer,  thinking  it  will  please  him. 

Some  of  the  most  successful  merchants  are  among 
the  first  to  reach  their  establishments,  knowing  that 
it  will  influence  the  employees  to  be  on  time  and  that 
they  might  feel  ashamed  if  their  employer  continually 
arrives  before  they  do.  Other  employers  are  extremely 
courteous  to  customers  making  small  purchases, 
demonstrating  to  the  employees  that  each  patron,  re- 
gardless of  the  size  of  the  purchase,  should  receive 
the  proper  courtesy  and  attention. 

If  you  have  a  task  that  must  be  finished  hurriedly, 
there  is  no  greater  incentive  than  to  help  personally, 
or  have  one  in  a  higher  position  assist  the  workmen, 
which  immediately  impresses  them  with  the  impor- 
tance of  a  speedy  completion. 

The  examples  of  John  D.  Rockefeller,  Andrew  Car- 
negie, Marshall  Field  and  such  leaders  of  men,  were 
followed  by  those  surrounding  them,  who  in  turn  set 
a  similar  example  to  those  with  whom  they  came  in 
contact. 

In  this  manner  the  ideals  of  an  employer  extend 
throughout  a  concern,  and  they  can  be  recognized  by 
the  actions  of  the  employees.  You  can  walk  into  an 
establishment,  or  receive  a  number  of  communications 
from  a  concern,  and  generally  judge  the  executive  and 
form  a  correct  opinion  of  the  management. 


DEVELOPMENT  87 

The  Understudy. — The  development  of  employees 
for  higher  positions  and  the  selection  of  lieutenants 
is  of  utmost  importance.  Employers  often  imagine 
that  they  do  not  have  the  material  to  fill  such  positions 
and  are  at  a  loss  when  the  vacancies  occur.  The  em- 
ployees in  the  lower  positions  may  be  compared  to  raw 
material  and  the  finished  product  is  largely  the  result 
of  the  training  they  receive.  Each  employee  holding 
a  position  of  any  consequence  should  have  an  assistant 
or  understudy,  one  who  is  capable  of  assuming  the 
duties,  if  the  one  holding  the  higher  position  is  ab- 
sent, leaves  or  should  be  promoted. 

The  understudy  should  be  made  to  believe  that  he 
may  be  called  upon  to  occupy  the  higher  position  and 
should  acquire  the  necessary  knowledge  and  develop 
himself  so  that  he  may  creditably  substitute  for  the 
man  he  assists.  A  number  of  employees  dislike  and 
become  jealous  of  a  capable  assistant,  thinking  he  may 
some  day  be  selected  for  that  position.  If  the  policy  of 
a  concern  is  fair,  and  the  employee  is  performing  his 
duties  in  an  able  manner,  he  should  not  have  such  a 
thought. 

In  such  cases,  one  is  very  profitable  to  his  employer 
and  valuable  to  himself;  the  employee,  thinking  his 
understudy  may  take  his  position,  will  inevitably  make 
for  the  highest  in  efficiency  and  produce  results  to  hold 
his  own.  With  few  exceptions,  every  actor  and  actress, 
including  such  stars  as  Sarah  Bernhardt,  John  Drew 
and  George  Cohan,  have  understudies  so  that  an  audi- 
ence will  not  be  disappointed  if  the  stars  are  disabled. 
In  every  establishment  the  lieutenants  and  stars  should 
have  understudies  that  the  business  may  be  conducted 
without  interruption  or  disappointment  if  any  individ- 


88  BUYING  BRAINS 

ual  is  unable  to  attend  to  his  regular  duties.  In  pre- 
paring for  an  emergency  and  developing  men  for 
higher  positions,  you  not  only  safeguard  against  the 
future  weakness  of  an  organization  but  you  stimulate 
the  employees  who  look  forward  with  hope  and 
ambition. 

Bethlehem  Steel  Corporation. — The  history  of  the 
Bethlehem  Steel  Corporation,  which  was  converted 
from  a  financial  wreck  into  a  great  power  within  a 
few  years,  is  the  best  known  example  of  how  men  can 
be  selected  from  your  own  organization  to  occupy  the 
responsible  positions. 

Mr.  Charles  M.  Schwab,  who  is  responsible  for 
this  remarkable  success,  in  an  interview  published  in 
the  New  York  Herald,  stated :  "I  am  not  a  believer  in 
genius.  I  believe  the  world  is  filled  with  such  men, 
who  can  do  as  Mr.  Carnegie  and  others  have  done  if 
they  have  a  similar  opportunity,  even  though  it  comes 
under  high  pressure  and  is  brief.  I  believe  it  is  just 
as  full  of  men  who  can  do  as  well  as  the  greatest  in 
all  walks  if  they  are  given  the  chance  and  the  proper 
development.  Acting  upon  this  belief,  I  determined 
to  train  the  prospective  heads  of  the  Bethlehem  Steel 
Corporation,  as  Mr.  Carnegie  had  trained  his  boys. 
I  selected  for  the  fourteen  heads  I  required,  boys  who 
already  were  at  Bethlehem.  Most  of  them  were  born 
there.  I  felt  sure  that  under  different  direction  they 
all  would  make  a  signal  success.  I  took  them  all  from 
minor  positions. 

"I  pulled  them  together  in  a  spirit  of  harmony.  I 
imbued  them  with  the  idea  that  sentiment  should  have 
just  as  fixed  a  place  in  the  management  of  the  place 
as  hard  work.     Not  one  of  these  boys  has  slipped  a 


DEVELOPMENT  89 

cog.  To-day  every  one  of  them  is  sure  of  a  comfort- 
able future.  They  are  the  Hfe  and  soul  of  the  Bethle- 
hem Steel  Corporation.  They  are  all  directors  of  the 
company.  They  meet  every  day  and  decide  the  policy 
of  the  company  as  a  unit.  They  surcharge  every  busi- 
ness transaction  with  sentiment  and  their  associations 
with  the  pleasantries  and  familiarities  of  affection.'* 

Outside  Help. — A  man  trained  and  developed  in 
an  organization  is,  naturally,  better  acquainted  with 
the  details  of  the  concern.  He  is  more  loyal  and  should 
be  more  valuable  than  one  who  has  been  developed  by 
a  competitor.  Employers  often  consider  it  easier  to 
engage  lieutenants  trained  by  others ;  the  result  is  that 
those  employers  who  should  be  friendly  with  each 
other  are  continually  antagonizing  one  another  by  en- 
gaging their  employees  after  they  have  acquired  the 
experience  and  training. 

The  employees  frequently  are  not  so  valuable  under 
changed  management.  The  employers  and  employees 
suffer  from  this  method  of  filling  the  higher  positions. 
Fair  treatment,  proper  environment  and  having  each 
individual  employed  in  a  position  for  which  he  is  fitted, 
have  a  marked  influence  on  the  ability  of  the  employee. 

Unless  an  employee  is  satisfied  with  his  position  and 
has  hopes  of  obtaining  a  better  one  in  the  future,  it  is 
impossible  for  him  to  do  justice  to  his  employer. 

Helping  Employees  to  Help  Themselves. — You 
cannot  expect  an  employee  to  perform  his  duties  in  a 
satisfactory  manner  unless  he  has  been  instructed  and 
trained.  The  employer  who  can  select  the  right  man 
for  the  right  job  and  develop  him  for  the  higher  posi- 
tion, is  rendering  a  service  to  the  employee  and  will  be 
rewarded  for  his  efforts. 


90  BUYING  BRAINS 

Employees  are  very  grateful  to  the  employer  who 
develops  them  and  makes  it  possible  for  them  to  oc- 
cupy higher  positions.  During  recent  years  machinery 
has  been  invented  and  improved.  We  are  now  de- 
veloping men  to  handle  the  machinery  in  an  efficient 
manner.  You  cannot  develop  the  men  mechanically. 
The  human  being  must  be  managed  by  one  who  works 
with  a  humane  spirit. 

"Live  Wires"  and  Contests. — Employees  are  fre- 
quently developed  unconsciously  by  placing  among 
them  a  worker  with  unusual  ability.  He  demonstrates 
what  is  possible  and  the  workmen  will  endeavor  to 
imitate  him.  The  capabilities  of  the  employees,  in  an 
entire  department,  are  often  dependent  upon  the  ability 
and  actions  of  the  head  of  that  department.  New  em- 
ployees often  imitate  the  one  instructing  them.  It  is 
a  good  plan  to  have  the  best  workman  within  view 
of  a  new  employee. 

Wages  is  not  the  only  incentive  to  employees.  They 
like  recognition  and  often  prefer  more  responsible  po- 
sitions at  the  same  wages,  rather  than  to  work  for  a 
long  period  without  promotion. 

Contests  appeal  to  those  who  are  ambitious  to 
demonstrate  their  superior  ability.  Though  the  prizes 
have  a  small  monetary  value,  they  develop  employees 
and  increase  their  performances. 

The  United  Cigar  Stores  Company  have  contests 
between  employees  of  the  various  stores,  both  in  sales 
and  distribution  of  a  specified  class  of  merchandise. 
A  number  of  concerns  have  inaugurated  contests 
among  their  salesmen.  The  competition  makes,  the 
ambitious  more  industrious  and  the  indifferent  men 
become  aroused,  as  they  are  anxious  to  make  a  satis- 


DEVELOPMENT  91 

factory  showing  when  their  records  are  compared  with 
others. 

However,  unless  the  contests  are  fairly  arranged 
and  managed  with  the  proper  spirit,  a  great  injury 
can  be  done  if  the  contestants  are  embittered  against 
each  other. 

Opportunity  for  Development. — Most  employees 
are  anxious  to  become  efficient.  If  they  understand 
and  are  interested  in  their  work,  they  will  develop  into 
more  able  employees  under  the  right  type  of  manage- 
ment. No  management  can  be  entirely  successful  un- 
less it  contains  the  human  element.  A  smile,  a  pleas- 
ant word  and  a  "Good  Morning"  to  all,  from  an  em- 
ployer, is  appreciated  by  the  employees ;  it  makes  them 
enjoy  their  work  and  they  become  more  industrious. 

Employers  receive  a  profit  from  the  services  of  the 
employees.  They  should,  in  addition  to  their  wages, 
be  profited  by  development  which  makes  higher  wages 
possible.  The  shorter  working  day  furnishes  an  op- 
portunity for  development  that  was  in  former  years  a 
hardship  and  in  many  instances  almost  impossible. 
Ambitious  employees  are  taking  advantage  of  the  extra 
hours  by  attending  night  schools,  taking  special 
courses  and  devoting  a  portion  of  their  spare  time  to 
reading. 

The  leading  merchants  are  encouraging  the  em- 
ployees in  this  educational  spirit  by  establishing 
schools  for  them,  conducting  special  instruction  and 
in  many  ways  furnishing  avenues  of  development 
which  are  mutually  beneficial. 

Smaller  merchants  who  cannot  afford  such  methods 
of  assistance  are  advising  their  employees  as  to  what 
branches  they  should  study  for  their  future  welfare. 


92  BUYING  BRAINS 

The  trade  and  industrial  schools  are  preparing  the 
children  for  later  employment.  These  schools  can  be 
greatly  assisted  if  the  employers  in  the  various  com- 
munities would  become  interested  in  an  advisory  ca- 
pacity, informing  the  instructors  as  to  the  requirements 
of  the  children  when  employed  later  in  life,  and  by 
co-operating  with  the  school  they  could  select  those 
who  had  been  trained  in  accordance  with  their  sug- 
gestions. 

In  the  schools  no  attempt  should  be  made  to  develop 
a  child  for  work  for  which  he  is  not  mentally  or  physi- 
cally qualified.  Vocational  study  is  helpful  in  start- 
ing the  child  on  the  right  road  to  success. 

Post-Education. — Employees  leaving  school  at  an 
early  age  thus  gain  in  commercial  training.  They 
should  also  receive  the  "after  education,"  which  is 
necessary  that  they  may  occupy  higher  positions. 

Employers  who  become  sufficiently  interested  in 
their  employees  to  ascertain  the  positive  and  negative 
qualities,  can  offer  valuable  suggestions  as  to  what 
studies  will  materially  aid  them  to  attain  the  higher 
standards.  An  employee  selected  for  promotion  after 
having  been  developed  in  such  manner,  serves  as  an  in- 
spiration to  the  other  employees,  who  will  be  anxious 
to  study  for  similar  promotion. 

Employers  who  subscribe  for  trade  papers,  technical 
magazines  and  books  for  their  own  development,  can 
perform  a  great  service  by  loaning  them  to  the  em- 
ployees, who  can  thus  improve  conditions  by  reading 
them.  A  great  many  persons  waste  a  large  portion 
of  their  spare  time  because  they  are  not  sufficiently 
interested  in  their  work,  while  others  would  be  re:- 
ceptive  if  they  were  properly  impressed  with  the  ad- 


DEVELOPMENT  93 

vantages  of  mental  development  and  were  shown  the 
proper  course  to  pursue. 

Every  mind  is  a  warehouse  wherein  knowledge  can 
be  stored,  to  be  recalled  when  the  opportunity  re- 
quires it. 

How  Others  Help  Employees. — ^The  National 
Cloak  and  Suit  Company  has  a  school  for  employees 
who  are  taught  by  twelve  teachers,  headed  by  a  prin- 
cipal who  was  formerly  a  school  superintendent.  The 
New  York  Board  of  Education  became  interested  and 
furnished  three  public  school  teachers,  and  one  hour 
a  day  of  the  employer's  time  is  given  to  study. 

The  John  Wanamaker  Commercial  Institute  was 
established  by  Mr.  Wanamaker  to  educate  the  young 
men  and  women  in  his  employ  who  were  prevented  by 
circumstances  from  attending  other  schools.  The 
courses  are  to  prepare  them  for  commercial  life.  Dur- 
ing 1 9 14  nearly  four  hundred  studied  in  this  institute. 

The  Department  Store  Educational  Association  of 
New  York,  which  provides  vocational  and  salesman- 
ship training,  recently  presented  forty-four  saleswomen 
at  Stem  Brothers  with  diplomas,  they  having  mas- 
tered the  various  studies. 

Discipline. — Discipline  is  necessary  in  every  concern, 
and  as  the  management  improves,  the  requirement  for 
discipline  is  lessened.  In  well-managed  establishments 
with  the  rules  determined  and  known  to  the  employees, 
very  little  discipline  is  required.  If  an  employee  en- 
joys his  work,  desires  to  retain  his  position,  and  is 
hopeful  of  promotion,  he  will  endeavor  to  conduct  him- 
self in  a  manner  that  will  please  the  management. 

In  former  years,  the  parent  would  thrash  a  child, 
the  teacher  had  a  special  rod  for  the  mischievous  boy. 


94  BUYING  BRAINS 

Both  the  parent  and  the  teacher  have  changed  their 
methods,  have  become  more  human  and  intelHgent  in 
the  handling  of  children. 

Autocratic  employers  have  not  acquired  the  wisdom 
of  the  parent  and  teacher,  still  clinging  to  antiquated 
tactics  in  handling  employees,  grasping  every  oppor- 
tunity to  abuse  those  employed. 

The  mental  thrashing  of  an  employer  leaves  more 
lasting  hatred  than  the  physical  beating  of  the  parent 
or  teacher.  The  result  is  that  the  employees  become 
untruthful,  deceive  their  employers  and  welcome  a 
chance  to  repay  them  for  their  hostile  attitude.  You 
cannot  compel  an  employee  to  give  his  best  ability  by 
abusing  him.  He  can  be  improved  through  instruc- 
tion and  fair  treatment,  and  will  then  willingly  give 
what  you  most  desire. 

The  best  intentioned  employee  will  make  mistakes. 
He  should  be  corrected  to  avoid  a  recurrence  and 
discipline  should  be  exercised  to  make  him  a  better 
employee  so  as  not  to  destroy  his  loyalty,  enthusiasm 
and  willingness. 

Discipline  should  be  administered  in  such  a  manner 
as  to  make  the  employee  regret  his  error  and  thankful 
to  you  for  the  manner  in  which  you  have  criticised 
him.  Without  proper  discipline  the  employees  may 
not  realize  their  mistakes.  It  is  folly  to  attempt  to 
conduct  a  business  without  it.  Continually  finding 
fault  and  seeking  occasions  to  belittle  the  employees  is 
even  more  foolish.  You  should  not  abuse  an  employee 
before  his  fellow-workers.  He  becomes  humiliated, 
dislikes  you,  and  his  mental  and  physical  self  will  fail 
to  respond  to  higher  achievements. 

Employees  have  a  feeling  of  sympathy   for  each 


DEVELOPMENT  95 

other.  Your  attack  will  be  resented  by  others  and 
they  will  regard  you  as  a  tyrant.  They  may  attempt 
to  please  you  while  you  are  present  but  when  you  are 
absent  they  will  give  you  what  they  think  you  deserve. 

Do  not  criticise  a  head  of  a  department  in  front  of 
the  employees  under  him,  else  he  will  not  be  able  to 
command  their  respect  and  will  lose  control  over  them. 

It  is  not  unusual  to  have  employees  thank  you  for 
your  criticism  when  they  are  convinced  that  you  do 
not  take  a  pleasure  in  reprimanding  them  and  the 
advice  is  sound  and  reasonable.  Do  not  expect  impos- 
sibilities and  never  condemn  an  employee  for  commit- 
ting an  offense  unless  you  are  prepared  to  suggest  the 
proper  procedure.  Do  not  attempt  to  scare  an  em- 
ployee by  screaming  at  him.  Talk  to  him  in  a  rational 
way ;  it  will  have  a  better  effect. 

In  some  concerns  the  employees  are  disciplined  in 
such  a  quiet  and  unassuming  manner  that  others  never 
know  when  it  takes  place  and  the  criticism  is  regarded 
as  friendly  advice  for  their  mutual  welfare.  It  is 
claimed  by  some  employers  that  all  employees  cannot 
be  treated  in  this  manner.  Those  who  will  not  accept 
the  milder  discipline  should  be  discharged. 

You  are  not  obliged  to  retain  the  services  of  those 
who  will  not  do  as  they  are  told.  Modern  manage- 
ment directs  you  to  treat  your  employees  in  a  humane 
manner.  It  is  always  a  good  policy  to  mention  to  the 
employees  that  they  should  not  commit  such  offenses. 
Explain  the  detrimental  effect — in  other  words,  trace 
the  cause  and  show  the  effect. 

Educate  your  employees  to  do  right,  reward  them 
for  faithful  services.  Those  who  are  worth  retaining 
will  obey  your  instructions  and  use  their  best  judgment 


96  BUYING  BRAINS 

to  give  satisfaction.  When  a  mistake  is  discovered, 
do  not  wait  for  a  repetition  by  others,  but  warn  them 
in  advance  with  a  proper  notice. 

The  best  leaders  are  not  those  who  make  the  em- 
ployees afraid  to  do  wrong.  No,  they  are  the  em- 
ployers who  influence  them  to  do  right. 

Fairness. — Discipline  should  be  twofold.  Em- 
ployees should  be  complimented  when  they  do  some- 
thing exceptionally  well,  and  welcome  criticism  when 
they  are  in  error.  If  the  executive  is  fair  and  con- 
siderate to  the  heads  of  the  departments,  they  will 
likely  follow  his  example  in  their  treatment  of  other 
employees.  If  the  discipline  is  just,  the  relationship 
between  the  employer  and  the  employee  is  pleasant; 
friction  is  almost  unknown,  an  intelligent  understand- 
ing prevails  and  harmony  exists. 

In  many  establishments  every  employee  knows  what 
is  expected  of  him  and  is  ashamed  of  his  own  errors. 
They  all  work  together  with  an  ambition  to  help 
their  friend — their  employer.  If  you  keep  an  accurate 
record  of  the  employees'  performances,  mistakes  and 
neglect  of  duty,  you  are  enabled  to  form  an  intelligent 
opinion  as  to  their  capabilities  and  are  able  to  render 
equitable  decisions  in  regard  to  promotion,  or  dismissal 
when  the  occason  arises. 

Frequently  the  head  of  a  department  will  take  a 
dislike  to  an  employee  and  make  an  exaggerated  or 
unjust  complaint  against  him.  Still  the  records,  if 
properly  maintained,  ensure  the  employee  a  fair  deal, 
and  you  are  not  misled  in  your  action.  This  is  one  of 
the  many  advantages  of  scientific  management.  .  No 
discipline  has  such  a  beneficial  effect  as  showing  an 
employee  a  bad  record  and  comparing  it  with  the 


DEVELOPMENT  97 

records  of  others  performing  similar  work.  An  em- 
ployee will  usually  admit  that  he  is  ashamed  of  such 
a  record  and  will  volunteer  to  improve  it  in  the  future. 

Imposing  Fines. — In  many  concerns  a  system  of 
imposing  fines  is  in  vogue  for  mistakes,  lack  of  re- 
sults, lateness  and  other  causes.  A  fine  imposed  is 
very  effective  and  prevents  the  commission  of  similar 
offenses,  but  it  embitters  the  employees  and  has  a 
detrimental  influence  on  their  minds  and  they  will  cease 
doing  more  than  is  actually  required  to  retain  their 
positions.  It  is  preferable  to  warn  them  of  their  mis- 
takes, and  if  they  do  not  discontinue  them,  it  is  far  bet- 
ter to  dismiss  the  employees  than  to  have  them  remain 
and  be  antagonistic. 

If  fines  are  imposed,  under  no  circumstances  should 
the  fines  collected  be  kept  by  the  employers.  The 
employees  would  naturally  question  the  justice  and 
object  of  the  fining  system.  It  is  a  good  plan  to  have 
the  fines  returned  in  some  manner  for  the  benefit  of  the 
employees.  Allow  a  committee  composed  of  employees 
to  decide  as  to  the  proper  distribution  of  the  fines 
collected. 

Employers  who  have  never  worked  for  a  wage,  or 
who  in  times  of  prosperity  may  have  forgotten  their 
struggling  days,  may  not  realize  what  these  small  fines 
mean  to  an  average  employee.  You  must  have  disci- 
pline, your  rules  should  be  obeyed,  the  employees  are 
expected  to  be  industrious  and  careful;  at  the  same 
time  you  should  be  just,  considerate  and  fair  with 
those  less  fortunate  than  yourself. 

Loyalty. — Employers  who  are  loyal  to  employees 
usually  have  loyal  workers.  You  cannot  expect  loyalty 
unless  you  inspire  and  deserve  it.    By  developing  an 


98  BUYING  BRAINS 

employee  and  being  fair  to  him,  he  is  grateful  to  you 
and  is  anxious  to  repay  you  by  showing  his  loyalty. 
In  times  of  emergencies  or  reverses,  the  real  test  of 
loyalty  of  employees  can  be  properly  estimated. 

In  some  concerns  employees  willingly  work  extra 
hours  and  make  every  possible  effort  to  be  of  value 
when  strenuous  conditions  require  it,  while  in  other 
establishments,  the  employees  are  indifferent  as  to  the 
condition  of  the  business,  shirk  their  duties,  disregard 
the  interest  of  the  employers  and  are  unwilling  to  per- 
form any  task  that  is  not  specified  and  included  in 
what  they  are  supposed  to  do. 

A  loyal  employee  uses  every  effort  to  please  a  patron, 
knowing  it  is  helpful  to  the  management,  believing  he 
will  receive  an  indirect  benefit.  Employees  have  been 
known  to  work  when  they  were  quite  ill,  against  the 
wishes  of  their  family  and  physician,  thinking  that 
their  presence  was  required  to  complete  certain  tasks. 

Loyal  workers  are  proud  of  their  concern  and  their 
employers  during  working  hours  and  after  hours  they 
are  constantly  thinking  of  the  betterment  of  their  estab- 
lishment. Employees  often  ridicule  the  management 
to  one  another,  and  frequently  make  known  their 
grievances  to  customers.  When  you  are  really  inter- 
ested in  the  welfare  of  the  employees,  develop,  assist, 
advise  and  help  to  educate  them,  a  loyalty  is  inspired 
that  is  remembered  many  years  to  come. 

Worthy  Employees. — Employees  who  start  in  the 
lower  positions  and  are  gradually  advanced  to  posi- 
tions of  authority  are  genuinely  interested  in  their 
concern  and  encourage  loyalty  among  others.  The 
attitude  of  a  head  of  a  department  toward  a  firm  has 
a  remarkable  influence  on  the  employees  in  his  de- 


DEVELOPMENT,  99 

partment.  An  infant  knows  by  intuition  when  persons 
really  care  for  him  and  the  feeling  is  reciprocal.  The 
employee  realizes  when  an  employer  is  friendly  and 
thinks  of  him  beyond  the  mere  results  he  produces, 
and  in  turn  naturally  thinks  of  the  employer  further 
than  the  wages  he  receives.  Loyal  employees  perform 
their  services  as  conscientiously  whether  you  are  at 
lunch,  in  a  hospital,  or  on  a  vacation,  just  as  though 
you  were  constantly  watching  them. 

The  Law  of  Compensation. — A  young  man  of 
twenty  years  was  sent  for  and  offered  a  more  lucra- 
tive position  than  the  one  he  was  holding  with  an 
employer  who  was  closing  out  his  business.  He  stated 
that  "He  could  not  accept  it  for  two  months  as  his 
employer  would  not  be  closed  out  until  that  time." 
When  the  prospective  employer  told  him  "the  offer 
was  conditional  that  he  accept  at  once,"  he  replied 
that  "he  would  not  desert  an  employer  who  had  en- 
gaged him  five  years  ago  and  had  always  treated  him 
fairly,  he  would  prefer  walking  the  streets." 

He  was  not  compelled  to  do  this.  His  employer 
heard  of  the  incident  and  secured  for  him  a  suitable 
position  when  he  discontinued  business. 

There  is  no  fixed  rule  for  producing  loyalty.  It  is 
the  natural  result  of  an  unmentioned  understanding 
between  the  employer  and  the  employee  to  help  one 
another.  The  spirit  of  loyalty  figures  prominently  in 
the  success  of  a  concern.  Many  of  the  failures  are  due 
to  the  lack  of  it. 

Interested  in  Their  Work. — In  order  to  have  your 
employees  interested  in  their  work,  it  is  essential  that 
they  should  enjoy  it.  You  should  assign  to  each  indi- 
vidual a  task  that  he  is  capable  of  performing,  the  en- 


loo  BUYING  BRAINS 

vironment  should  be  such  as  to  make  his  work  pleasant. 

Employers  and  employees  can  become  so  attached  to 
their  place  of  business  that  they  will  be  eager  to  arrive 
and  work  cheerfully  throughout  the  day. 

A  prominent  banker  who  had  two  days  of  holiday 
said:  "He  could  hardly  wait  for  the  opening  hour  of 
business  as  he  became  irritable  and  nervous  when  he 
remained  away  from  his  office  for  too  long  a  period." 

Employees  who  are  given  responsibility  and  obtain 
satisfactory  results  often  find  more  enjoyment  in  their 
work  than  in  their  hours  of  recreation.  By  develop- 
ing employees  and  making  them  satisfied  with  their 
positions,  a  feeling  of  interest  and  enjoyment  is  in- 
spired. In  some  establishments,  where  the  proper 
spirit  exists,  the  employees  derive  real  pleasure  from 
their  employment. 

Obtaining  Maximum  Results. — It  is  impossible  to 
obtain  maximum  results  unless  the  employees  enter  the 
establishment  in  a  right  frame  of  mind  and  leave  it  at 
night  with  pleasant  thoughts.  At  a  subway  station, 
a  merchant  was  heard  to  say  to  a  young  lady,  "I  am 
indeed  glad  you  like  your  position  and  enjoy  your 
work.  I  wish  you  a  pleasant  day."  Several  young 
men  who  overheard  the  conversation  smiled  at  each 
other;  evidently  they  were  employed  under  different 
circumstances. 

There  is  no  reason  why  the  employees  should  not 
enjoy  their  work  if  they  are  properly  assigned  and 
have  connected  with  the  right  type  of  employer.  You 
should  help  your  employees  enjoy  their  tasks;  the  re- 
suits  will  bear  the  tags  of  satisfied  workers. 

The  Giving  of  Suggestions. — A  fixed  rule  in  many 
printing  shops  is  to  "follow  copy,"  no  matter  where 


DEVELOPME^JT  ,   ,    ,,,,,,,  ,;^oi 

'.    >  />\  ',    '  ''  {  }  ''>'  ^  V 

it  leads  you.  In  many  concerns  it  is  understood  that 
the  employees  must  follow  instructions,  regardless  of 
the  consequences.  In  other  concerns,  the  employers 
and  department  heads  issue  instructions  but  are  open 
minded  and  willing  to  receive  suggestions. 

A  number  of  leading  firms  have  suggestion  boxes 
where  the  employees  may  deposit  suggestions  for  im- 
provement in  the  service  or  management.  In  some 
instances  they  keep  a  record  of  the  suggestions  made 
and  adopted,  giving  those  who  offer  the  valuable  ones 
the  preference  in  promotion,  while  others  give  cash 
prizes,  or  stated  amounts  for  the  suggestions  ap- 
proved. The  concern  that  will  not  listen  to  the  sug- 
gestions of  the  employees  cannot  successfully  compete 
with  an  establishment  of  right-thinking  employees. 
The  minds  of  many  will  outweigh  the  thoughts  of  the 
few. 

Fire  Commissioner  Adamson,  of  New  York,  made 
an  offer  of  an  "administration  medal"  to  the  fireman 
who  made  the  best  suggestion  for  the  improvement 
of  the  fire-fighting  efficiency  of  the  force.  Five  thou- 
sand firemen  sent  in  their  ideas.  A  number  of  the 
suggestions  were  considered  valuable  and  have  since 
been  adopted.  Twenty-three  of  the  firemen  received 
honorable  mention  for  their  ideas.  Receiving  so  many 
replies,  it  was  difficult  for  the  committee  to  decide  as 
to  the  selection  of  the  best  suggestion. 

The  fireman  awarded  the  prize  had  suggested  that 
it  was  unfair  not  to  keep  a  definite  record  of  the  effi- 
ciency of  the  members  of  the  department.  If  they  did 
anything  unusually  heroic  in  the  Hfe-saving  way  it  was 
noted;  and  if  they  did  anything  unusually  bad  it  was 
noted,  either  by  dismissal  or  by  some  punishment,  but 


.TQ2 . .  .  ^ . . . .    ,    BUYING  BRAINS 

between  two  extremes  there  was  no  system  of  records. 

The  other  suggestions  included  the  exercise  of  the 
firemen  during  leisure  hours;  the  kind  of  sprinklers 
to  be  used  under  cornices;  how  to  prevent  hydrants 
from  freezing,  the  cutting  off  of  the  gas  supply,  and 
many  others  of  sufficient  value  but  too  numerous  to 
mention. 

In  your  establishment  you  probably  have  employees 
who  have  ideas  and  thoughts  that  would  prove  val- 
uable to  you.  Furnish  them  an  outlet  and  receive  their 
suggestions  in  such  a  manner  as  will  encourage  them 
to  think  about  their  work.  All  of  the  suggestions  can- 
not be  adopted,  but  you  can  give  them  consideration 
and  decide  which  will  be  helpful  to  the  management. 
You  should  also  have  your  employees  ask  questions 
about  their  work;  in  their  indecision  they  will  often 
act  according  to  what  they  think  the  better  way,  rather 
than  ask  your  advice.  The  employees  should  not  pro- 
ceed with  a  task  if  they  are  doubtful  as  to  the  proper 
course.  If  they  are  in  doubt  allow  them  the  privilege 
of  inquiring  about  it. 

The  F.  B.  Stearns  Company,  of  Cleveland,  Ohio, 
makers  of  the  Stearns-Knight  cars,  hold  meetings  after 
five  o'clock,  which  are  attended  by  the  officials  and 
department  heads ;  the  mechanics  are  privileged  to  ask 
questions  and  make  suggestions.  This  arrangement 
was  made,  as  the  department  head  is  often  too  busy 
during  the  regular  hours  to  give  the  employees  the 
consideration  they  should  have.  Co-operation  of  this 
nature  is  beneficial  to  both  the  employees  and  manage- 
ment, it  can  be  followed  profitably  by  many  others. 

When  George  J.  Whelan  retired  as  president  of  the 
United  Cigar  Stores  Company,  he  stated  that  'This 


DEVELOPMENT  103 

company  was  built  up  by  the  men  in  it,  and  not  by  me. 
I  get  the  credit  for  it  but  I  didn't  do  it.  Practically 
everything  in  this  company,  even  the  auditing  system, 
was  invented  by  somebody  else.  I  simply  let  them  go 
ahead  and  do  it." 

Generalities. — Too  much  attention  cannot  be  given 
to  the  workrooms,  the  arrangement,  surroundings  and 
environment.  A  study  of  the  conditions  may  reveal 
that  the  temperature  can  be  changed  so  that  the  em- 
ployees enjoy  better  health  and  are  able  to  accomplish 
superior  results. 

The  lighting  system  ought  to  be  such  that  the  light 
is  as  evenly  distributed  as  possible.  There  should  not 
be  an  unnecessary  strain  on  the  eyes.  Workers  can 
improve  the  quality  and  increase  the  quantity  of  their 
work,  if  they  are  not  compelled  to  depend  upon  arti- 
ficial light.  A  noise  of  any  kind  distracts  an  employee. 
The  passing  of  others  disturbs  those  who  are  attempt- 
ing to  concentrate. 

The  proper  wearing  apparel  is  essential.  If  the  em- 
ployees cannot  work  advantageously  in  their  street 
attire,  there  should  be  a  suitable  room  where  they  can 
change  their  clothes.  Employees  know  and  appreciate 
when  you  are  thinking  of  their  welfare  and  are  trying 
to  improve  their  working  conditions. 

Some  employers  do  not  consider  it  necessary  to  cater 
to  the  employees.  They  imagine  the  employees  should 
be  glad  to  have  a  position.  You  are  willing  to  cater 
to  the  customers  to  increase  their  patronage.  Why  not 
cater  to  the  employees  to  improve  their  ability  and 
make  each  unit  a  solid  link  in  the  chain  of  success  ? 

''Employees  are  what  they  were  when  you  employed 
them  plus  what  you  have  made  them," 


CHAPTER  VI 

COMPENSATION 

SCIENTIFIC  management,  instructions  and  de- 
velopment are  all  important  factors  to  increase 
the  ability  and  worth  of  an  employee,  but  these  helpful 
movements  must  be  coupled  with  fair  compensation  if 
you  desire  the  co-operation  of  the  employee  and  seek 
to  obtain  maximum  results.  Many  employees  are  will- 
ing to  overlook  objectionable  features  of  their  employ- 
ment if  they  receive  a  fair  remuneration  for  service 
rendered.  Welfare  work,  liberal  treatment  and  in- 
structions have  a  tendency  to  make  an  employee  more 
loyal  and  industrious,  but  without  a  fair  reward  for 
services  rendered,  the  time  and  money  expended  in 
other  directions  is  largely  wasted. 

Comparison. — No  matter  what  position  an  em- 
ployee occupies,  he  determines  by  a  comparative  basis 
whether  he  is  paid  as  well  as  friends  doing  similar 
work  in  other  places,  or  if  his  wages  are  in  proper 
proportion  to  that  received  by  others  in  the  same  estab- 
lishment. You  cannot  expect  to  have  an  employee 
permanently  satisfied  with  his  position  unless  he  is  paid 
a  fair  wage  for  his  services. 

The  wage  problem  has  not  been  given  ethical  con- 
sideration by  either  the  employer  or  the  employee,  con- 
sequently each  party  is  seeking  to  obtain  an  unfair 
advantage  over  the  other.  The  employer  pays  as  little 
as  he  imagines  will  retain  the  services  of  an  employee 

104 


COMPENSATION  105 

who  is  determined  not  to  give  an  over-measure  for  the 
money  he  receives — but  this  must  be  remedied. 

Personal  Equation. — A  large  percentage  of  em- 
ployees are  underpaid  for  what  they  are  capable  of 
producing;  conversely  an  equally  large  percentage  are 
overpaid  for  what  they  really  produce. 

It  is  far  better  to  encourage  an  employee  to  accom- 
plish his  maximum  capacity  by  paying  him  an  ade- 
quate wage  for  what  he  produces. 

The  reason  scientific  management  is  welcomed  by 
employees,  and  is  profitable  to  employers  is  that  in- 
stead of  paying  a  man  for  his  time,  you  pay  him  for 
the  work  he  performs.  If  a  fair  rate  of  compensation 
is  established  in  addition  to  the  assistance  rendered  by 
the  management,  he  has  no  complaint  to  make — draw- 
ing his  wage  on  the  strength  of  his  own  ability. 

Exertion  and  Results. — Employees  prefer  exerting 
themselves  and  receiving  higher  wages  to  taking  their 
time  and  being  paid  a  lower  wage.  Paying  for  results 
and  allotting  time  for  a  task  permits  you  to  intelli- 
gently estimate  on  contracts  to  be  undertaken.  Pay- 
ing for  time  and  receiving  money  for  production  makes 
the  calculations  difficult  and  inaccurate. 

//  an  employee  is  paid  for  time  he  watches  the  clock; 
if  he  is  compensated  for  performance  he  watches  his 
work. 

It  is  only  natural  when  employees  receive  the  same 
wage,  regardless  of  the  quantity  and  quality  of  their 
work,  that  there  is  no  incentive  to  exert  themselves 
mentally  or  physically. 

Neither  the  employer  nor  the  employee  will  secure 
his  full  share  of  prosperity  unless  the  employee  pro- 
duces his  maximum  capacity.    There  has  been  a  more 


io6  BUYING  BRAINS 

equitable  adjustment  of  compensation  in  the  trades 
and  industries  than  in  distribution.  In  most  industries, 
the  rate  of  compensation  for  the  same  work  in  differ- 
ent concerns  does  not  vary  to  such  an  extent,  but  in 
distribution  it  is  not  uncommon  for  a  clerk  to  receive 
double  the  wages  of  the  man  across  the  street  holding 
a  similar  position. 

Former  Practice. — In  former  years  it  was  the  prac- 
tice of  the  merchant  to  dispose  of  his  merchandise  at 
prices  as  high  as  possible.  A  salesman  was  judged  by 
the  size  of  the  profits  he  obtained.  The  progressive 
merchants,  however,  decided  that  it  was  preferable  to 
ask  a  fair  profit  and  retain  the  good  will  of  their 
patrons.  The  same  principle  is  true  in  determining  the 
compensation  of  employees,  but  the  employers  are  tak- 
ing longer  to  recognize  this  fact. 

The  employee  and  the  customer  may  be  deceived 
for  a  short  period  but  will  eventually  learn  that  an 
unfair  advantage  has  been  taken  and  finally  the  em- 
ployer will  be  the  loser. 

Rewarding  Conscientious  Effort. — Fair  compen- 
sation is  the  most  convincing  argument  that  an  em- 
ployer's prosperity  is  of  special  interest  to  the  employee 
and  he  will  endeavor  to  increase  the  earnings  of  the 
concern. 

Employees  should  be  rewarded  for  conscientious 
services ;  the  best  method  is  to  develop  them  for  higher 
positions  and  increase  their  wages  in  accordance  with 
their  promotion.  A  business  does  not  usually  permit 
a  continual  advance  of  wages  for  the  lower  positions, 
therefore  it  is  a  good  plan  to  start  your  employees  at 
the  bottom,  eliminate  the  inefficient  and  assist  the  am- 
bitious and  capable  to  attain  the  higher  rank.     Every 


COMPENSATION  107 

time  an  employee  is  engaged  from  the  outside  to  occupy 
the  more  important  positions,  you  lessen  the  distribu- 
tion of  rewards  for  those  already  employed. 

If  you  have  waited  in  line  for  a  long  period  to  gain 
admission  to  a  meeting  or  purchase  tickets  and  had 
some  person  from  the  outside  step  in  front  of  you, 
your  feeling  on  such  an  occasion  is  quite  similar  to  that 
of  an  employee  waiting  for  promotion  and  then  having 
an  outsider  obtain  the  position  desired.  When  an 
employee  makes  a  request  for  an  increase,  do  you  con- 
sider whether  he  is  worth  more  than  he  is  receiving,  or 
if  you  can  retain  his  services  without  granting  the 
increase  ? 

If  They  are  Worth  More  to  Others,  They  are 
Probably  Worth  More  to  You. — Your  employees 
should  not  be  compelled  to  seek  employment  elsewhere 
to  secure  fair  compensation,  and  then  have  you  offer 
them  higher  wages  when  they  have  another  opportunity 
and  want  to  leave  you.  When  an  employee  starts 
searching  for  other  employment  he  loses  interest  in 
your  establishment,  and  if  he  secures  a  higher  wage 
under  such  circumstances  when  leaving  your  employ, 
he  does  not  fully  appreciate  or  feel  grateful  for  the 
increase,  and  the  spirit  of  co-operation  may  never  occur 
to  him  in  the  future. 

A  manager  of  a  department  store  boasted  that  he 
could  always  tell  when  an  employee  was  approaching 
him  for  a  raise  and  he  would  walk  in  another  direction. 
The  result  was  that  the  more  efficient  employees  be- 
came disgusted  with  his  actions;  they  also  walked  in 
another  direction  and  obtained  employment  where  the 
conditions  were  more  favorable.  Some  of  these  em- 
ployees have  since  held  responsible  positions  in  com- 


io8  BUYING  BRAINS 

peting  concerns;  this  formerly  prosperous  department 
store  has  discontinued  business  and  its  patrons  are  now 
being  served  by  other  growing  stores  with  fairer 
methods. 

The  Weak  and  Inefficient. — By  continually  refus- 
ing to  promote  help  and  increase  wages,  the  services  of 
those  who  are  not  ambitious,  or  are  not  capable  of  se- 
curing employment  elsewhere  will  be  retained,  and  the 
best  types  of  employees  will  leave  and  be  employed  by 
others.  Do  not  attempt  to  make  your  labor  pay  the 
penalty  of  your  inefficiency  and  losses  in  the  manage- 
ment, purchase,  sales  and  other  departments.  Each 
division  should  be  so  perfected  as  to  be  able  to  pay 
adequate  compensation  for  services  rendered.  Labor 
must  always  be  justly  rewarded. 

The  introduction  of  scientific  management  in  busi- 
ness makes  it  possible  to  develop  employees  so  they  can 
earn  and  receive  higher  wages.  No  concern  can  afford 
to  pay  its  employees  a  more  liberal  amount  than  they 
earn  and  successfully  compete  with  others,  but  the  con- 
cern can  increase  the  earning  capacity  of  its  employees 
and  retain  more  able  workmen  than  the  employers  who 
are  less  scientific  in  management.  The  success  of  a 
concern  becomes  known  to  other  workmen;  the  best 
types  fully  realize  that  there  are  greater  opportunities 
with  well-managed  concerns  and  naturally  seek  em- 
ployment with  them. 

Capital  and  Labor. — The  disputes  between  capital 
and  labor  include  a  variety  of  differences,  but  the  chief 
cause  of  conflict  is  the  question  of  compensation. 
Whenever  the  two  parties  attempt  to  arbitrate,  each  is 
often  willing  to  grant  other  concessions,  if  the  wage 
rate  can  be  determined  satisfactorily,  the  employee  de- 


COMPENSATION  109 

manding  as  high  a  wage  as  he  can  secure,  and  the  em- 
ployer anxious  to  pay  as  low  a  rate  as  he  can. 

The  Wage  Problem. — The  average  employee  has 
nothing  else  to  convert  into  cash  than  his  services  and 
naturally  wants  to  dispose  of  them  at  a  reasonable 
price.  He  cannot  expect  to  receive  a  higher  price  than 
its  real  value  permanently,  but  offer  him  fair  compen- 
sation and  he  will  be  entirely  satisfied  with  his  transac- 
tion. If  he  knows  he  can  increase  his  selling  price  by 
increasing  the  value  of  his  services,  he  will  aim  to  be- 
come more  valuable  to  you,  as  scientific  management 
will  prove. 

The  Keeping  of  Records. — The  usual  mistake  of 
many  employers  is  to  keep  no  accurate  records  which 
would  enable  one  to  properly  recognize  work  of  su- 
perior quality.  Efficient  employees  will  finally  con- 
clude that  it  is  wasted  effort  if  they  do  not  secure  pro- 
motion or  higher  wages  than  those  who  are  indifferent 
and  less  capable.  Efficient  employees  must  be  rewarded 
to  retain  their  efficiency,  in  addition  to  increasing  the 
ability  of  those  who  would  be  contented  with  their 
present  wage — unless  there  was  an  incentive  to  arouse 
them.  An  increase  in  wage  furnishes  an  exceptional 
opportunity  to  inject  the  personal  element  and  secure 
the  loyal  support  of  the  employee  by  inspiring  him 
to  continue  to  improve  himself  for  still  greater  achieve- 
ment. 

Arousing  Interest. — There  must  be  an  incentive 
that  appeals  to  the  individual  if  desired  to  influence 
him  to  exert  himself — the  greatest  incentive  is  addi- 
tional compensation.  In  work  and  in  play,  most  per- 
sons are  inclined  to  take  it  easy  unless  they  are  stirred 
or  aroused  to  do  otherwise.    Men  of  wealth  often  play 


no  BUYING  BRAINS 

games  for  a  small  amount,  believing  that  there  is  an 
added  interest  and  effort  when  they  are  playing  for 
money.  In  baseball  we  have  the  post-season  series, 
which  enables  the  players  of  the  leading  teams  of  the 
two  leagues  to  earn  additional  compensation.  It  adds 
interest  to  the  game ;  it  has  an  influence  on  the  playing 
of  the  clubs  and  the  habits  of  the  players  who  do  every- 
thing that  is  possible  to  share  in  the  post-seasons' 
receipts. 

In  a  holiday  rush  the  employees  often  imagine  that 
they  are  imposed  upon  and  have  a  tired  appearance, 
but  when  they  receive  a  stated  salary  and  secure  extra 
compensation  for  additional  sales,  an  expression  of 
satisfaction  can  be  noticed;  the  employees  are  en- 
thusiastic and  are  sorry  that  the  holiday  rush  does  not 
extend  over  a  longer  period. 

Financial  Lross. — When  an  employee  is  carefully 
selected  for  a  position,  and  is  furnished  with  the  neces- 
sary instructions,  considerable  has  been  invested  in 
him.  Unless  the  investment  yields  satisfactory  re- 
turns, you  become  dissatisfied  with  the  investment,  let 
the  employee  go  and  suffer  a  financial  loss.  After  hav- 
ing invested  in  an  employee,  everything  possible  should 
be  done  to  have  him  produce  satisfactory  results,  and 
the  best  method  is  to  furnish  him  with  the  incentive 
to  do  it. 

In  some  concerns,  the  lavatories  and  secluded  cor- 
ners are  the  meeting  places  for  employees  who  take 
periodical  rests,  believing  that  the  compensation  will 
be  the  same,  whether  they  take  it  easy  or  otherwise. 

The  theaters,  ball  parks  and  pool  rooms  are  filled 
with  employees  who  are  supposed  to  be  selling,  collect- 
ing or  doing  other  outside  work.    The  employees  con- 


COMPENSATION  in 

elude  that  these  habits  are  maintained  by  others  who 
receive  as  much  compensation  as  they  do  and  the  wages 
will  be  the  same  as  if  they  spent  their  entire  time  work- 
ing. If  the  incentives  offered  were  sufficient  that  they 
would  appeal  more  strongly  than  the  temptation  to 
attend  a  matinee  or  a  ball  game,  the  men  would  work 
more  steadily  whether  they  were  watched  or  not.  An 
employer  who  has  not  done  similar  work  himself,  or 
who  has  not  made  tests  of  the  capabiHties  of  the  men 
and  does  not  keep  accurate  records  of  results,  is  con- 
stantly deceived  by  employees. 

Some  Need  Watching. — Workmen  who  are  not 
satisfied  with  their  positions  and  are  not  offered  in- 
centives sometimes  work  three  times  as  quickly  when 
an  employer  pays  the  department  an  occasional  visit. 
New  employees  are  often  cautioned  by  others  not  to 
do  too  much  work.  They  are  told  that  they  will  not 
be  rewarded  for  increased  efforts  and  that  it  reflects 
unfavorably  upon  the  balance  of  them. 

A  new  traveling  salesman  for  one  of  the  largest 
wholesale  concerns  in  the  country  was  called  aside  and 
told  *'never  make  more  than  one  town  in  a  day,  be- 
cause if  you  ever  begin  covering  two  towns  in  a  single 
day,  they  will  expect  all  of  us  to  do  it  and  will  reduce 
the  sales  force." 

A  draftsman  holding  a  new  position  asked  one  of 
the  employees  for  information  regarding  his  work. 
His  question  was  answered  on  condition  that  in  the 
future  he  would  not  turn  out  as  much  work  as  he  had 
done  the  first  few  days  of  his  employment. 

These  and  similar  occurrences  are  the  result  of 
employers  being  unfair  to  the  employees,  or  not  offer- 
ing them  proper  incentives. 


112  BUYING  BRAINS 

"Fair  Play." — The  manager  of  a  small  concern 
(which  was  controlled  by  a  very  successful  man)  was 
relating  an  arrangement  he  had  made  with  a  new  em- 
ployee and  described  the  advantages  of  it.  His  lis- 
tener, who  had  become  a  leader  in  his  industry,  from 
a  humble  beginning,  remarked,  "You  are  only  consid- 
ering our  advantages  and  not  his  interests."  A  good 
bargain  is  one  that  is  fair  to  both  parties,  otherwise 
the  arrangement  will  be  of  short  duration  and  very 
unsatisfactory. 

Improvement. — It  is  conceded  by  most  employers 
that  employees  must  expect  a  reward  in  some  form  to 
have  them  increase  their  energy  and  ability ;  otherwise 
they  will  not  attempt  to  improve  themselves.  All  con- 
cerns do  not  permit  the  same  kind  of  reward.  A  plan 
that  is  suitable  in  one  place  is  not  applicable  to  another, 
but  the  underlying  principles  are  similar  in  both  cases. 
There  must  be  constant  thought  imbued  in  the  mind 
of  the  employee  that  it  will  be  beneficial  to  exert  him- 
self. The  prospect  of  promotion  and  higher  wages  will 
stimulate  some  employees,  while  others  can  be  better 
influenced  by  knowing  the  individual  act  will  be  re- 
warded by  immediate  returns. 

Rewards. — A  great  many  persons  cannot  picture 
the  future  and  become  impatient  waiting  for  something 
that  they  have  no  assurance  will  ever  take  place.  This 
class  of  employees  will  produce  better  results  if  they 
obtain  a  definite  reward  the  following  pay  day. 

A  number  of  plans  of  compensation  vary  in  both 
method  and  results ;  one  plan  may  preserve  the  quality 
and  create  a  better  co-operative  spirit,  another  may 
increase  the  quantity  at  the  expense  of  quality,  while 
the  plan  which  is  considered  ideal,  improves  the  quality. 


COMPENSATION  113 

increases  the  quantity,  and  has  a  tendency  to  establish 
a  better  relationship  between  the  employer  and  the 
employee. 

Whatever  plan  is  undertaken,  the  employee  must  be 
assured  that  all  promises  will  be  kept  and  that  the 
rewards  will  be  promptly  given.  It  is  far  better  not 
to  inaugurate  a  plan  than  to  start  it  and  not  execute  it 
exactly  as  agreed  and  understood. 

Various  Plans. — In  the  factories  we  have  the  piece- 
rate  plan ;  in  distribution  the  commission,  and  in  both 
manufacturing  and  distributing  the  salary  and  bonus 
plan  is  being  used  extensively.  All  these  are  steps  in 
the  direction  of  paying  for  results  instead  of  hours  of 
labor,  but  if  these  plans  are  not  properly  applied  they 
can  do  a  great  deal  of  harm  and  injustice.  In  some 
instances  the  piece-rate  and  the  commission  basis  may 
be  effective  and  beneficial,  but  in  many  cases  they  will 
increase  the  quantity  and  sacrifice  the  quality  of  ser- 
vice. The  effect  of  the  piece-rate  in  the  industries  and 
commission  in  distribution  is  quite  similar. 

The  employer  is  conservative  and  merely  pays  for 
what  is  actually  earned  by  the  employees.  But  these 
plans  have  a  tendency  to  make  the  employer  and  em- 
ployee both  lack  a  feeling  of  mutual  interest  and  co- 
operation. The  employee  believing  that  he  is  only  paid 
for  what  he  produces  has  an  independent  spirit  and 
resents  criticism  and  interference  by  the  management. 
The  employer  only  paying  for  what  is  accomplished 
does  not  extend  the  necessary  assistance  and  appears 
unconcerned  as  to  what  the  individual  performs. 

The  Piece-Rate  Plan. — In  manufacturing,  certain 
standards  should  be  maintained.  The  employer  and 
the  employee  continually  disagree  with  each  other  a& 


114  BUYING  BRAINS 

to  the  quality  that  should  be  required.  The  employees 
not  receiving  the  proper  instructions  continue  to  per- 
form their  tasks  in  a  tiresome  or  improper  manner  for 
long  periods  without  being  corrected  or  otherwise 
shown.  Employers  fail  to  realize  when  they  calculate 
the  overhead  charges,  that  the  inefficient  employees  are 
a  distinct  loss  to  them.  The  piece-rate  causes  con- 
tinual disputes  and  many  employers  think  that  em- 
ployees doing  a  certain  kind  of  work  are  not  entitled 
to  earn  over  a  fixed  amount.  The  employers  quite 
frequently  readjust  the  piece-rates  and  the  employees 
conclude  that  it  is  useless  to  exert  themselves  as  there 
will  probably  be  another  reduction  in  the  rate. 

There  is  probably  a  greater  strain  under  the  piece- 
rate  system  than  any  other  plan.  Employees  desiring 
money  for  a  fixed  purpose  will  often  attempt  to  do 
more  than  they  can  physically  endure. 

There  is  no  loyalty  and  co-operation  under  the 
piece-rate  plan  and  it  is  considered  by  many  as  a  poor 
substitute  for  the  stated  salary.  It  insures  full  service 
for  money  received,  but  is  far  from  ideal  when  the 
employer  and  employee  are  indifferent  to  the  welfare 
of  each  other  and  neither  is  willing  to  co-operate  or 
assist. 

The  Commission  Plan. — The  commission  plan  in 
distribution  increases  the  efforts  of  the  salesmen,  but 
has  a  detrimental  effect  on  present  profits  and  future 
results.  It  is  true  that  a  salesman  will  have  larger 
sales  on  a  commission  basis  than  he  would  on  a  stated 
salary  without  an  expectation  of  increased  compensa- 
tion based  on  his  annual  sales. 

A  commission  salesman  will  naturally  consider  his 
individual  interest,  may  disregard  the  welfare  of  his 


COMPENSATION  115 

employer  and  feel  independent  to  work  without  con- 
stant interference. 

A  commission  salesman  may  make  sales  to  cus- 
tomers when  he  is  sceptical  of  their  financial  condition 
and  attempt  to  convince  his  employer  that  the  prospec- 
tive customer  is  financially  sound. 

The  commission  salesman  may  pay  scant  attention  to 
the  small  buyers  of  to-day  who  may  be  large  consumers 
in  the  near  future.  The  struggling  young  merchant 
who  is  conservative  in  his  purchases  appreciates  cour- 
tesy and  attention,  but  receives  very  little  of  either 
from  the  average  commission  salesmen. 

The  Retail  Plan. — The  commission  basis  is  not  in 
vogue  to  such  an  extent  in  retailing  as  in  wholesaling. 
Frequently  when  it  has  been  tried  in  retailing  the  re- 
sults have  been  discouraging.  The  retail  salesman 
purposely  avoids  those  making  small  purchases  and  the 
customer  who  requires  half  a  yard  of  silk  to  match 
the  style  recently  purchased  is  promptly  informed  that 
they  do  not  have  it  in  stock.  Any  compensation  plan 
that  does  not  permit  the  employer  to  demand  sendee 
in  addition  to  results,  lacks  the  fundamental  essentials 
necessary  to  success. 

The  Salary  and  Bonus  Plan. — The  salary  and 
bonus  plan  has  been  tried  successfully  in  both  manu- 
facturing and  distributing  and  is  considered  more  ideal 
and  nearer  perfection  than  any  other  plan  suggested. 
It  insures  a  stated  salary  to  the  employee  and  removes 
the  uncertainty  and  worry  when  an  employee  knows 
the  minimum  compensation  he  will  receive.  Employers 
paying  a  salary,  feel  sufficiently  interested  to  co-oper- 
ate and  assist  the  employee,  so  that  he  will  earn  at 
least  as  much  as  the  agreed  compensation.    The  salary 


ii6  BUYING  BRAINS 

should  be  the  current  rate  that  average  employees 
would  earn  performing  such  work  under  customary 
management.  The  salary  should  be  sufficiently  large 
enough  for  the  employee  to  defray  his  necessary  ex- 
penses for  food,  raiment  and  shelter,  and  should  be  a 
fair  return  for  the  results  expected  of  an  employee 
who  does  not  earn  a  bonus.  The  bonus  will  stimulate 
the  employee  as  much  as  the  piece-rate  as  it  has  the 
advantage  of  the  piece-rate,  without  including  the  dis- 
advantages. 

The  Scientific  Plan. — ^Under  scientific  manage- 
ment, thousands  of  employees  are  earning  much  higher 
wages  than  they  would  otherwise  receive,  and  the  em- 
ployers are  more  prosperous  than  those  who  are  still 
clinging  to  the  antiquated  methods. 

The  most  successful  compensation  plan  in  connec- 
tion with  scientific  management  has  been  the  one  in- 
troduced by  Mr.  H.  L.  Gantt.  The  plan  is  both  ethical 
and  equitable.  It  stimulates  the  workmen ;  it  is  fair  to 
both  the  employer  and  the  employees.  Mr.  Gantt 
recognizes  that  a  workman  should  be  paid  a  reasonable 
wage  for  his  hours  of  labor ;  that  he  should  be  given  a 
bonus  if  he  performs  a  task  measured  up  to  the  stand- 
ard. The  task  should  not  be  too  hard,  nor  too  easy, 
the  employee  should  be  neither  overworked  nor  under- 
worked. 

The  Gantt  Compensation  Plan. — The  Gantt  Com- 
pensation Plan  has  been  instrumental  in  making  the 
Taylor  Scientific  Management  what  it  is  to-day.  The 
two  combined  ensure  efficient  service  and  fair  com- 
pensation. 

Scientific  management  records  what  an  employee 
does  (the  results  determine  compensation),  furnishes 


COMPENSATION  117 

an  accurate  record  for  the  employee  and  shows  the 
workman  what  he  has  accompHshed.  Under  the  Gantt 
system,  tests  are  made  as  to  what  an  average  workman 
can  do  in  a  day  and  he  is  given  that  task  to  perform. 
If  the  workman  fails  he  is  still  given  the  stated  wage 
for  his  day^s  work,  if  he  succeeds  he  receives  the  bonus. 

In  this  way  the  employee  becomes  interested  and  is 
assisted  in  his  work,  if  he  fails  in  the  performance  of 
it  the  foreman  extends  the  necessary  help.  In  order 
that  the  foreman  will  not  overlook  those  who  are  un- 
able to  succeed,  he  receives  a  proportionate  bonus  if 
all  workmen  perform  their  task  up  to  the  standard. 
The  Gantt  system  contains  the  human  element,  is  help- 
ful to  the  employee,  beneficial  to  the  employer  and 
makes  higher  wages  possible  for  efficient  services. 
The  employee  is  given  the  opportunity  of  earning  ad- 
ditional compensation,  is  assured  of  a  fair  wage  and 
appreciates  the  co-operation  and  assistance. 

The  employer  obtains  the  maximum  ability  of  the 
employee,  reduces  the  cost  of  supervision  and  is  able 
to  increase  his  output  without  an  increase  of  invest- 
ment. You  should  be  entirely  just  and  reasonable  in 
determining  the  standard  task  and  should  not  expect 
to  continually  increase  the  task,  or  begrudge  the  em- 
ployees the  bonus  they  earn. 

The  Gantt  Idea  Transplanted. — The  salary  and 
bonus  plan  proved  so  effective  in  manufacturing  that 
a  number  of  wholesale  and  retail  concerns  have  intro- 
duced similar  plans. 

The  workman  may  be  ''physically''  lasy,  the  sales- 
man may  he  "mentally''  lazy.  Both,  however,  can  he 
aroused  hy  the  incentive  to  earn  a  honus,  if  they  in- 
crease their  efforts. 


ii8  BUYING  BRAINS 

The  owners  of  large  department  stores  who  have 
adopted  the  salary  and  bonus  plan  have  been  in  some 
instances  greatly  surprised  at  the  increased  sales,  never 
realizing  the  capabilities  of  their  employees. 

A  salesman  in  one  of  the  department  stores,  on  a 
disagreeable  Saturday  prior  to  Christmas,  remarked 
that  "the  inclement  weather  that  day  would  cost  him 
personally  ten  dollars."  You  can  be  assured  that  he 
was  making  the  best  of  the  situation  and  that  he  was 
doing  everything  in  his  power  to  make  the  sales  that 
day  as  large  as  possible. 

The  B.  Altman  Foundation  has  made  liberal  allow- 
ance for  a  bonus  to  be  paid  their  sales  force.  This 
naturally  has  a  tendency  to  attract  the  unusual  type  of 
employees.  The  manufacturers  and  jobbers  have  been 
well  pleased  with  the  salary  and  bonus  plan  wherever 
the  arrangements  have  been  intelligently  made.  It  is 
possible  while  talking  to  the  average  salesman  to  de- 
termine by  his  attitude  whether  he  is  receiving  a  fixed 
salary,  or  if  he  is  earning  an  additional  amount  on 
the  individual  transaction.  The  salesman  working  for 
a  bonus  is  enthusiastic,  energetic,  willing  and  shows  a 
desire  to  serve  and  satisfy  his  patrons.  He  cultivates 
the  habit  of  thinking  what  each  sale  he  consummates 
means  to  him  personally. 

Many  of  the  employees  who  would  not  save  any 
money  if  they  were  receiving  a  stated  salary  or  com- 
mission, use  their  salaries  to  defray  necessary  expenses 
and  deposit  their  bonus  regularly  in  the  bank. 

Pay  Day. — While  it  is  easier  and  more  simple  for 
concerns  to  pay  monthly  than  semi-monthly  or  weekly, 
it  is  often  quite  inconvenient  for  employees.  If  an 
individual  has  been  out  of  employment  and  secures  a 


I 


COMPENSATION  119 

monthly  wage,  he  may  be  compelled  to  borrow  in  ad- 
vance against  his  wages  and  contracts  a  habit  that  may 
continue  during  his  period  of  employment. 

It  may  be  necessary  for  him  to  borrow  from  a  loan 
broker  at  an  exorbitant  rate  of  interest,  or  patronize 
such  firms  who  charge  extravagant  prices  for  the  privi- 
lege of  extending  credit.  It  is  a  well-known  fact  that 
where  pay  days  are  not  frequent,  a  large  percentage 
of  employees  come  to  work  with  soiled  linen  and  with- 
out proper  nourishment  and  a  number  of  them  often 
become  careless  with  their  money  when  they  receive 
a  monthly  wage  at  one  time. 

The  Purchase  Power. — The  wages  received  by  the 
employee  must  be  in  proportion  to  its  purchase  power. 
This  question  should  be  given  greater  consideration  by 
the  owners  of  chain  stores,  factories  located  in  differ- 
ent sections  and  concerns  doing  an  interstate  business. 

While  the  employees  may  be  rendering  similar  ser- 
vice and  receiving  the  same  wages,  the  purchasing 
power  of  the  compensation  may  be  entirely  different 
in  the  various  sections. 

The  manager  of  a  store  in  a  small  city,  receiving 
twenty  dollars,  may  be  able  to  save  a  portion  of  his 
income  while  the  manager  of  a  similar  store  in  a  large 
community  may  find  it  difficult  to  live  satisfactorily  on 
the  same  wage. 

The  Minimum  Wage. — The  minimum  wage  law 
has  been  advocated  by  some  of  the  leading  students  of 
industrial  problems,  but  several  prominent  merchants 
have  predicted  it  as  a  detrimental  influence  upon  com- 
mercial interests.  A  number  of  them  are  anxious  to 
leave  the  question  alone,  as  they  are  afraid  of  the 
judgment  of  the  state  legislators,  who  are  frequently 


I20  BUYING  BRAINS 

extreme  and  incompetent  to  pass  on  industrial  issues, 
many  of  them  not  having  had  commercial  experience. 

There  is  certainly  a  need  for  the  enactment  of  mini- 
mum wage  laws,  not  too  severe  to  work  a  hardship 
on  the  employers,  but  to  include  minimum  compensa- 
tion that  will  ensure  the  necessities  of  life  to  those 
who  are  compelled  to  depend  upon  their  own  resources 
for  their  livelihood.  A  minimum  wage  law  would  be 
a  protection  to  the  employers  who  desire  to  pay  living 
wages,  but  who  will  not  attempt  it  as  long  as  their 
competitors  do  not. 

The  employees  receiving  sufficient  compensation  to 
purchase  the  necessities  of  life  would  be  healthier, 
happier  and  more  efficient  and  the  employers  would 
receive  proportionately  better  returns  for  their  money. 

The  Consumer  to  Bear  the  Burden. — Before  the 
New  York  Factory  Investigating  Committee  some  of 
the  department  store  heads  complained  saying,  that 
"the  increased  wages  would  have  to  be  borne  by  the 
consumer."  The  increased  efficiency  should  balance 
the  increase  in  wage.  If  otherwise,  the  percentage  of 
increase  to  the  consumer  would  be  so  trifling  that  it 
would  not  affect  the  distribution  of  merchandise  and 
the  consumers  generally  will  gladly  pay  the  price  that 
will  furnish  labor  with  an  adequate  living  wage. 

Under  a  minimum  wage  law,  all  competing  estab- 
lishments would  be  subject  to  the  same  rulings  and  it 
would  be  more  preferable  than  present  conditions,  un- 
der which  unfair  employers  may  take  advantage  of 
the  employers  who  may  be  more  just. 

The  Orphan. — The  compensation  should  be  so  ad- 
justed that  orphans  leaving  institutions  and  those  who 
must  support  themselves,  will  receive  sufficient  wages 


COMPENSATION  121 

for  their  efforts  to  entitle  them  to  a  decent  living; 
otherwise  they  must  continue  to  be  dependent  upon 
charitable  organizations  or  be  deprived  of  a  fair  chance 
in  life's  battles  by  being  handicapped  in  attempting  to 
labor  without  sufficient  nourishment. 

The  Women. — The  fair  wage  for  women  is  a  ques- 
tion that  is  distasteful  to  many  employers,  but  the 
situation  must  be  faced  sooner  or  later.  Scientific 
management  measures  production  and  pays  a  compara- 
tive wage.  The  achievements  of  the  male  and  female 
should  also  be  compared  and  the  women  should  re- 
ceive a  fair  wage  for  what  they  produce.  Competition 
in  many  instances  makes  the  price  and  this  is  often 
true  in  determining  the  wage  for  women. 

The  High  Cost  of  Living. — In  former  years,  most 
of  the  fathers  supported  their  families  and  the  girls 
would  remain  at  home  to  assist  their  mother.  As  the 
living  expenses  grew,  many  fathers  did  not  earn  suffi- 
cient salaries  to  furnish  the  necessities  for  their  fami- 
lies and  the  daughters  applied  for  employment  with 
the  thought  that  whatever  they  earned  would  relieve 
the  financial  condition  at  home. 

Frequently  they  were  not  expected  to  pay  board  but 
merely  to  clothe  themselves  and  contribute  a  few  dol- 
lars toward  the  rent.  In  competition  with  them  there 
were  others  looking  for  employment  such  as  widows  or 
orphans,  or  those  forced  to  support  families  where 
the  head  of  the  house  was  incapacitated. 

Reduction  of  Wage. — The  wage  scale  for  women 
was  consequently  reduced  to  the  lowest  possible  level, 
not  because  the  majority  of  women  were  not  self-sup- 
porting, but  on  account  of  the  competition  of  the  mi- 
nority who  were  contented  to  work  for  less  than  living 


122  BUYING  BRAINS 

wagesf.  It  is  no  secret  that  hundreds  of  girls  who  were 
willing  to  work  honorably  for  an  honest  living  have 
been  tempted  to  immoral  places  in  order  that  they  may 
have  better  clothes,  nourishment  and  reasonable  com- 
fort. 

Any  business  worth  conducting  can  and  should  pay 
an  equitable  wage  to  women;  in  determining  their 
compensation  the  qnality  and  quantity  of  their  work 
should  be  considered  and  a  just  reward  given  for  what 
they  produce. 

Workmen's  Compensation. — Legislation  in  regard 
to  workmen's  compensation  for  industrial  accidents 
has  been  introduced  in  more  than  forty  foreign  coun- 
tries including  all  European  countries,  excepting  Tur- 
key. 

The  United  States  was  behind  others  in  adopting 
laws  that  would  insure  relief  to  the  injured  workman 
and  the  family  dependent  upon  him. 

During  the  past,  the  burden  of  the  accidents  fell 
upon  the  workmen  who  were  not  prepared  to  bear  it 
and  their  families  were  either  in  want  or  had  to  seek 
aid  from  charitable  organizations. 

Liability. — The  employers  carried  liability  insur- 
ance to  protect  themselves  against  lawsuits,  but  dis- 
regarded the  interests  of  employees  who  were  com- 
pelled to  collect  damages  from  a  third  party  who  took 
advantage  of  technicalities  to  evade  payment  of  claims 
of  the  injured  workmen.  Employees  were  compelled 
to  sue  for  damages  and  were  handicapped  by  not  being 
able  to  employ  counsel  of  the  same  caliber  as  those 
engaged  by  the  insurance  companies  and  being  in  im- 
mediate need  of  money  were  tempted  to  settle  their 
claims  at  the  figures  offered  by  the  companies. 


COMPENSATION  123 

Various  States. — The  schedule  of  compensation  for 
specified  injuries  varies  in  different  states  which  have 
adopted  compensation  laws.  The  fixed  amounts 
(whatever  they  may  be)  are  an  improvement  over 
the  former  method  of  determining  the  amount  of  dam- 
age after  an  employee  is  injured. 

The  Workmen's  Compensation  Laws  as  enacted  in 
some  of  the  States,  are  considered  by  many  employers 
as  an  added  expense  and  a  hardship,  but  it  is  certainly 
a  fair  and  proper  solution  of  an  important  question. 

Other  Insurance. — Employers  do  not  hesitate  to 
carry  insurance  for  fire,  life,  credit,  glass  and  other 
forms,  which  gives  them  relief  in  times  of  disaster. 
Why  then  should  they  not  carry  insurance  for  their 
employees  that  will  be  beneficial  to  them  when  acci- 
dents occur  ? 

The  workmen  who  have  met  with  accidents  have 
received  very  small  amounts,  or  have  waited  long  pe- 
riods for  settlement  so  that  the  money  received  did  not 
materially  assist  them  when  they  needed  it  most.  In- 
juries to  the  workmen  in  the  performance  of  their  du- 
ties should  be  borne  by  the  employer  and  the  expense 
of  the  insurance  should  be  added  to  the  cost  of  the  mer- 
chandise. 

Employers  Awakened. — The  compensation  laws 
have  not  only  provided  a  more  substantial  amount  to 
the  injured  workmen,  but  have  awakened  the  employ- 
ers to  the  need  of  offering  greater  protection  to  the 
lives  of  their  employees. 

Regular  inspection  of  various  industries  have  dis- 
closed the  fact  that  safety  devices  and  r^les  of  caution 
have  greatly  reduced  the  number  of  accidents.  There 
still  remains  much  to  be  done  in  this  direction. 


124  BUYING  BRAINS 

An  investigation  of  928  buildings  in  New  York 
where  garments  were  manufactured  disclosed  that  91 
per  cent,  were  without  fire  alarm  systems  and  in  98 
per  cent,  no  fire  drills  were  held.  Sprinkler  systems 
were  not  installed  in  many  of  the  buildings  where  they 
were  required  by  law,  and  the  stairways  of  a  number 
of  structures  were  not  enclosed  in  accordance  with  the 
statutes. 

It  is  not  sufficient  that  proper  laws  should  be  enacted 
to  protect  the  employees.  Such  laws  should  be  rigidly 
enforced.  The  employers  who  co-operate  to  reduce  the 
number  of  accidents,  lessen  the  cost  of  their  insurance, 
and  the  payment  for  injuries  sustained  should  not 
prove  a  burden  but  he  regarded  as  an  industrial 
necessity. 


CHAPTER  VII 
PROFIT-SHARING 

TF  EMPLOYEES  receive  fair  compensation  and 
-*-  proper  working  conditions  more  can  hardly  be 
demanded. 

Profit-sharing  is  what  a  large  percentage  of  the  em- 
ployees would  like  to  have,  but  they  have  no  right  to 
ask  for  it.  Profit-sharing  should  not  be  introduced  by 
the  employer  as  a  substitute  for  something  to  which 
the  employee  is  entitled,  but  as  an  additional  incentive 
to  arouse  him  to  higher  accomplishments  for  mutual 
benefit. 

No  matter  how  large  a  salary  an  employee  receives, 
or  what  position  he  may  occupy,  he  imagines  he  is 
playing  the  game  for  his  employer;  but  give  him  a 
share  of  the  profits  and  he  at  once  assumes  the  atti- 
tude that  he  is  playing  the  game  for  himself.  Profit- 
sharing  and  scientific  management  have  both  scored  a 
number  of  failures  as  well  as  successes,  which  proves 
conclusively  that  both  can  be  conducted  successfully  if 
they  are  inaugurated  with  sufficient  intelligence  and 
forethought. 

The  Give  and  Take  Principle. — Selfish  motives 
frequently  have  been  instrumental  in  defeating  the  pur- 
pose of  profit-sharing — giving  little  and  expecting 
much — and  resulting  in  receiving  less  than  was  antici- 
pated. It  seems  impossible  for  a  certain  type  of  em- 
ployers who  really  believe  in  modern  methods  of  con- 
ducting business,  to  bring  their  plans  to  a  satisfactory 
termination.  In  perfecting  the  profit-sharing  plans, 
they  constantly  think  of  their  interests,  and  how  they 

125 


126  BUYING  BRAINS 

will  derive  a  benefit  without  considering  the  effect  it 
will  have  upon  the  employees  who  are  supposed  to  be 
the  beneficiaries.  The  plans  are  sometimes  tied  with  a 
number  of  strings  which  make  the  employees  conclude 
that  they  are  too  complicated  and  not  worth  while 
untangling. 

Not  Philanthropic. — Profit-sharing  is  not  philan- 
thropy and  shares  should  not  be  distributed  with  such 
a  thought.  Employees  are  not  looking  for  charity  and 
naturally  resent  propositions  which  have  the  philan- 
thropic flavor.  Employees  who  receive  a  share  of  the 
profits  of  a  concern  are  ambitious  to  increase  the  earn- 
ings so  that  they  will  receive  a  larger  amount  for 
themselves,  and  with  the  desire  of  repaying  the  em- 
ployer for  his  fairness.  Men  who  are  an  asset  in  creat- 
ing excess  profits  are  really  entitled  to  more  than  mere 
wages. 

After  current  expenses  are  paid  and  capital  is  re- 
paid by  liberal  dividends,  a  small  share  of  the  net 
profits  should  be  given  to  those  who  have  assisted  in 
making  such  a  condition  possible.  This  is  neither  a 
new  thought  nor  socialism;  it  was  practiced  to  some 
extent  by  Andrew  Carnegie,  John  D.  Rockefeller, 
Marshall  Field,  Charles  M.  Schwab  and  other  success- 
ful men.  They  took  with  them  into  partnership  the 
leading  men  of  their  organization,  in  order  that  they 
might  permanently  retain  the  services  of  such  able  em- 
ployees. Why  should  not  the  same  principle  be  ex- 
tended so  as  to  include  other  worthy  employees  ? 

Give  Just  Reward. — Employees  who  have  helped 
to  carry  out  your  ideas  (those  who  have  assisted  to 
build  a  successful  business  around  you)  should  receive 
a  few  crumbs  from  the  plate  of  success. 


PROFIT-SHARING  127 

While  it  is  true  that  present  employees  can  be  re- 
placed with  others  who  will  gladly  accept  the  positions, 
faithful  and  conscientious  services  cannot  be  secured 
by  the  shifting  of  employees.  If  a  concern  is  properly 
conducted,  each  year  means  added  loyalty  and  an  in- 
creased spirit  of  co-operation. 

Loyalty,  the  Return. — Employers  frequently  re- 
mark that  the  employees  do  not  take  interest  in  their 
work,  but  if  you  give  them  a  share  of  the  profits  and 
make  them  feel  that  the  business  partly  belongs  to 
them,  their  changed  attitude  will  be  a  great  surprise  to 
you.  Employees  will  naturally  waste  opportunities, 
material  and  time,  if  there  is  no  incentive  to  do  other- 
wise but  let  them  fully  realize  that  by  saving  the 
wastes,  you  can  afford  to  give  them  more  than  mere 
wages  and  every  employee  will  be  watching  and  think- 
ing about  your  interests. 

Profit-sharing  does  not  necessarily  mean  the  giving 
away  of  present  profits  but  it  affords  the  employees 
an  opportunity  of  paying  themselves  out  of  the  addi- 
tional profits  they  create. 

Sharing  a  Small  Percentage. — If  your  merchan- 
dise costs  you  75  per  cent,  of  your  selling  price  and 
your  expenses  are  15  per  cent.,  your  net  profits  should 
amount  to  10  per  cent.  If  your  employees  are  wasteful 
your  net  profits  may  easily  be  reduced  to  5  per  cent, 
or  less;  if  they  are  economical  and  assist  to  increase 
the  volume  of  business,  considerably  more  than  10 
per  cent,  may  be  earned  on  your  sales.  It  is  perfectly 
fair  and  proper  that  you  should  claim  the  credit  and 
are  entitled  to  receive  the  major  portion  of  the  profits 
of  a  business  that  you  have  financed  and  guided  into 
a  safe  port,  but  the  men  aboard  who  have  helped  you 


128  BUYING  BRAINS 

land  safely  should  be  given  a  just  share  of  the  gain. 

A  Comparison. — Profit-sharing  to  some  extent  can 
be  compared  with  the  giving  of  trading  stamps.  One 
is  the  giving  of  stamps  to  retain  steady  patronage  and 
increase  volume,  the  other  is  to  retain  steady  employees 
and  increase  profits. 

Trading  stamps  are  a  poor  substitute  for  quality  of 
merchandise  and  profit-sharing  should  not  be  substi- 
tuted for  fair  conditions.  A  number  of  right-thinking 
employers  desire  to  inaugurate  profit-sharing  plans 
with  their  employees  but  do  not  fully  appreciate  that 
the  average  workman  has  not  the  same  business  reason- 
ing and  commercial  experience  that  they  and  their 
associates  may  possess. 

Instead  of  making  the  plans  extremely  simple,  they 
are  in  many  instances  more  intricate  than  the  agree- 
ments entered  into  among  the  employers. 

Profit-sharing  plans  that  will  appeal  to  and  be  under- 
stood by  one  class  of  employees  will  not  bear  the  de- 
sired effect  if  adopted  for  another  class. 

Formulation  of  Individual  Plans. — Henry  Ford's 
profit-sharing  plans  were  formulated  to  include  a  large 
number  of  workmen,  the  plans  were  simplified  and  pre- 
sented in  such  form  that  the  workmen  thoroughly 
understood  the  conditions  and  appreciated  them. 

The  Ford  plan  is  not  possible  nor  advisable  for 
every  concern  that  desires  to  introduce  profit-sharing, 
but  the  frankness  and  fairness  of  the  plan  should  be  a 
guide  to  others.  The  majority  of  workmen  who  re- 
ceived (for  several  years)  a  share  of  the  profits — ^the 
amounts  having  been  stated  in  advance — ^will  consider 
it  as  part  of  their  compensation  and  be  disappointed 
if  they  did  not  receive  that  amount  continuously. 


PROFIT-SHARING  X2g 

Not  Charity. — It  is  important  that  the  employees 
be  convinced  that  employers  are  not  distributing  profits 
as  an  act  of  charity,  nor  as  additional  wages,  but  that 
they  are  sharing  in  the  earned  profits  because  their 
employers  considered  that  they  were  entitled  to  do  so, 
and  that  in  times  of  depression,  or  when  profits  do  not 
exist,  they  cannot  expect  them. 

Profit-sharing  will  accomplish  most  and  be  more 
appreciated  among  enlightened  employees  who  fully 
realize  that  energy,  loyalty  and  service  will  help  create 
and  preserve  profits  and  that  it  is  possible  for  them  to 
produce  greater  results  for  mutual  benefit. 

If  the  employer  afterwards  alters  the  original  con- 
ditions of  the  plans,  or  practices  deception,  the  detec- 
tion will  have  a  disastrous  influence  on  the  employees 
and  he  probably  will  regret  having  introduced  profit- 
sharing. 

The  Plans. — The  plans  should  conform  with  the 
laws  of  the  State,  be  extremely  simple  and  should  be 
honorably  inaugurated  and  executed.  It  is  well  to  take 
into  your  council  several  of  the  representative  em- 
ployees and  present  the  plan  in  a  tentative  form  before 
it  is  finally  introduced  in  your  establishment.  In  this 
manner  you  will  receive  criticism  from  the  employees' 
viewpoint;  it  would  show  the  sincerity  of  your  pur- 
pose and  these  men  will  become  your  spokesmen,  and 
at  the  same  time  explain  and  convince  the  other  em- 
ployees that  you  are  endeavoring  to  furnish  them  with 
a  new  and  better  opportunity.  It  should  not  be  for- 
gotten that  when  profit-sharing  plans  are  introduced 
employees  are  taken  into  partnership — deal  with  them 
frankly  and  fairly. 

Profit-Sharing  "Ford." — Henry  Ford  is  the  most 


I30  BUYING  BRAINS 

conspicuous  man  in  the  automobile  industry.  He  has 
furnished  individuals  of  moderate  means  throughout 
the  world  with  a  simple  and  satisfactory  automobile 
at  a  nominal  price.  He  has  also  solved  the  profit- 
sharing  problem  in  a  masterly  manner.  His  plans  have 
been  an  inspiration  to  other  employers.  Every  Ford 
automobile  is  a  running  advertisement  for  profit-shar- 
ing. It  was  predicted  by  many  that  he  would  regret 
his  introduction  of  such  a  liberal  policy,  but  his  testi- 
mony before  the  Industrial  Commission  in  191 5 
showed  that  he  was  well  pleased  with  the  results. 

The  Test. — In  making  a  comparison  of  figures  be- 
fore and  after  profit-sharing  was  inaugurated,  he 
quoted  from  the  records  of  March,  191 3,  and  March, 
1 914.  The  statistics  showed  165  discharged  instead 
of  1276,  115  quit,  instead  of  870,  166  five-day  men  or 
"floaters,"  leaving  without  notice  compared  to  ^156 
during  the  same  month  of  the  preceding  year.  These 
comparative  figures  sliould  be  a  sufficient  answer  as  to 
whether  the  introduction  of  profit-sharing  was  success- 
ful or  otherwise. 

Qualifications. — The  qualifications  necessary  to 
participate  in  the  Ford  profit-sharing  plan  clearly 
demonstrate  the  human  element  that  can  be  injected 
into  industrial  life.  Those  qualified  for  participation 
in  profits  were  of  three  classes : 

1.  Married  men  living  with,  and  taking  good  care 
of,  their  families. 

2.  Single  men  over  22  years  of  age  who  are  of 
thrifty  habits. 

3.  Young  men  under  22  years  of  age,  and  women, 
the  sole  support  of  some  next  of  kin. 

The  person  must  be  in  the  employment  of  the  com- 


PROFIT-SHARING  131 

pany  six  months  before  he  can  participate  in  profits. 
Wages  and  profits  are  paid  every  two  weeks  in  cur- 
rency. 

Results. — The  efficiency  of  the  men  under  the  plan 
has  increased  from  15  to  20  per  cent,  with  reference  to 
work  produced  in  an  eight-hour  day  versus  the  com- 
parison in  a  nine-hour  day.  Daily  absentees  from  work 
decreased  from  a  total  equivalent  to  10  per  cent,  of  the 
working  forces  under  old  conditions  to  three-tenths 
of  one  per  cent. 

Mr.  Ford  stated  *'that  the  plan  was  adopted  because 
of  the  knowledge  that  the  market  rate  of  wages  was 
not  sufficient  for  men  to  properly  care  for  self  and  de- 
pendents, and  that  the  environment  in  which  its  em- 
ployees were  thus  made  to  live,  gave  rise  to  mental 
anxiety  and  a  physical  condition  that  made  it  utterly 
impossible  for  the  human  agency  to  deliver  all  the 
effort  of  which  it  was  capable  in  fulfilling  the  best  and 
large  functions  for  which  it  was  designed  to  work  at 
home  and  in  the  community.  The  institution  of  a  new 
order,  treating  men  like  men  in  man  fashion,  has 
brought  out  much  of  human  salvage  and  proven  that 
barriers  between  employers  and  employees,  thought 
to  exist  and  often  existing,  can  be  removed." 

Dennison  Manufacturing  Company. — In  April, 
19 1 5,  the  Supreme  Court  dissolved  the  Dennison 
Manufacturing  Company,  of  Massachusetts,  and 
cleared  the  way  for  this  concern  with  assets  of  many 
millions  of  dollars  to  turn  over  its  property  to  its  2400 
employees  in  a  profit-sharing  plan  more  radical  than 
that  of  Henry  Ford's. 

The  plan  under  which  the  Dennison  Company  is  be- 
ing operated  is,  that  the  stockholders  elect  the  directors. 


132  BUYING  BRAINS 

The  old  stockholders — with  holdings  amounting  to 
$4,500,000 — have  no  voice  in  the  affairs  of  the  new 
company.  They  became  preferred  stockholders  en- 
titled to  draw  8  per  cent,  on  their  investment  and  no 
more.  All  the  common  stock  was  turned  over  to  the 
men  and  women  actually  working  in  the  plant.  How- 
ever, not  all  of  the  2400  became  holders  of  the  com- 
mon stock,  although  all  of  them  share  in  the  profits. 
Workers  to  hold  common  or  voting  stock,  must  re- 
ceive at  least  $1200  a  year.  Under  this  rule  200  of 
the  2400  are  common  shareholders  and  participate  in 
the  actual  administration  of  the  corporation. 

Before  the  Dennison  Manufacturing  Company  had 
introduced  their  present  form  of  management,  they 
had  for  a  number  of  years  shared  their  profits  with 
employees  earning  over  $1200.  A  few  months  prior 
to  the  inauguration  of  their  latest  and  more  liberal 
plan,  the  writer  had  discussed  profit-sharing  with  one 
of  the  Dennison  employees,  who  spoke  enthusiastically 
of  what  profit-sharing  has  meant  to  both  the  company 
and  the  employees. 

He  explained  that  * 'there  were  various  committees 
composed  of  employees  who  were  helpful  to  the  man- 
agement. The  employees  who  did  not  share  in  the 
profits  were  hopeful  that  some  day  they  would  be  in- 
cluded in  the  profit-sharing  class.  The  spirit  of  inter- 
est and  co-operation  was  contagious  and  those  who 
did  not  share  in  the  profits  appeared  to  be  as  earnest 
and  conscientious  as  the  others." 

Facts  and  Figures. — E.  I.  Du  Pont  De  Nemours 
Powder  Company  in  their  19 14  annual  report  stated, 
"The  following  record  showing  the  number  of  stock- 
holders and  the  percentage  who  are  employees  of  the 


PROFIT-SHARING 


133 


company,  in  comparison  with  similar  conditions  in  past 
years : 

Year  Stockholders 

1907 809,  of  whom     218,  or  27  per  cent.,  were  employees 

1908 955,  of  whom     250,  or  26  per  cem.,  were  employees 

1909 1,335,  of  whom     524,  or  39  per  cent.,  were  employees 

1910 1,695,  of  whom     764,  or  45  per  cent.,  were  employees 

1911 2,163,  of  whom     990,  or  45  per  cent,  were  employees 

1912 2,697,  of  whom  1,440,  or  53  per  cent,  were  employees 

1913 2,935,  of  whom  1,047,  or  36  per  cent.,  were  employees 

1914 3,093,  of  whom  1,184,  or  38  per  cent.,  were  employees 

Common  Stock  for  Employees. — The  plan  of  dis- 
tributing bonus  common  stock  to  deserving  employees 
and  of  offering  preferred  stock  for  subscription  has 
proved  satisfactory.  Under  this  plan,  12,722  shares 
of  common  stock  have  been  awarded  and  12,403  shares 
of  preferred  stock  have  been  subscribed  and  are  being 
paid  for  under  the  requirements  of  the  plan.  They 
say  in  part :  "In  this  connection  it  is  a  great  pleasure 
to  call  attention  to  the  loyalty  and  satisfactory  service 
of  the  employees  of  the  company.  We  thank  them 
for  their  co-operation  and  work,  which  has  shown  its 
results  in  the  gratifying  and  continuous  prosperity  of 
the  company's  interests  and  investments." 

The  dividend  record  of  the  company  is  as  follows: 

Preferred  Stock 
Annually,  since  organization  in  1903 — 5  per  cent. 

Common  Stock 
1904 —  y2  per  cent.     19 10 — 12  per  cent. 


1905— 3>^ 

1906 — 6y2 
1907—7 
1908 — 7 
1909—7% 


1911 — 12 
1912 — 12 

1913—  8 

1914 —  8 


134  BUYING  BRAINS 

If  you  analyze  the  figures  given  in  this  report  you 
will  notice  that  in  the  three  years  1910,  191 1  and  1912, 
when  there  was  the  largest  percentage  of  employees 
among  the  stockholders,  the  dividends  amounted  to 
12  per  cent.,  which  is  quite  in  contrast  with  1905,  when 
a  dividend  of  3>^  per  cent,  was  declared. 

Some  Realty  Firms. — A  number  of  the  important 
realty  firms  of  New  York  have  instituted  profit-sharing 
plans,  among  them  being  Douglas  Robinson,  Charles 
S.  Brown  Company,  Douglas  L.  Elliman  &  Company, 
and  M.  Morgenthau,  Jr.  Company. 

Capital  and  Labor. — Mr.  Carnegie  recently  stated 
that  "He  considered  the  plan  of  the  United  States 
Steel  Corporation  to  make  workmen  shareholders,  the 
greatest  of  all  forward  steps  yet  taken  for  bringing 
workmen  and  capitalists  closer  together." 

A  Boston  Concern. — William  Filene's  Sons  Com- 
pany, of  Boston,  who  have  inaugurated  a  number  of 
movements  for  the  benefit  of  its  employees,  have  also 
a  profit-sharing  plan.  Certain  department  executives, 
buyers,  assistant  buyers,  floor  superintendents  and 
executives,  share  in  the  merchandise  profits.  The  cor- 
poration gets  its  profits  in  merchandise  discounts. 

The  plan  is,  that  after  a  certain  fixed  profit  has  been 
paid  to  the  holders  of  the  capital  stock,  the  profit  over 
and  above  this  amount  is  divided  among  this  group  of 
employees. 

The  National  Biscuit  Company. — The  National 
Biscuit  Company  has  no  profit-sharing  plan,  but  the 
company  have  assisted  the  employees  to  become  own- 
ers of  the  preferred  stock  of  the  corporation.  Fifteen 
years  ago  they  introduced  a  plan  that  permitted  the 
employees    to    purchase    stock    on    the    installment 


PROFIT-SHARING  135 

plan.  In  19 10  out  of  7500  shareholders,  2528  were 
employees. 

The  Lowney  Chocolate  Company. — The  Lowney 
Chocolate  Company  distribute  a  bonus  of  five  per  cent, 
of  the  annual  wages  to  employees  connected  with  the 
firm  for  one  year.  Similar  customs  are  in  practice  in 
the  confectionery  trade. 

Mr.  Nelson— Mr.  N.  O.  Nelson,  of  the  N.  O.  Nel- 
son Manufacturing  Company,  has  written  an  article 
on  profit-sharing  published  in  "System,"  the  magazine 
of  business.  He  not  only  related  his  experience  in 
connection  with  sharing  profits,  but  well  explains  the 
advantages  of  conducting  business  with  many  partners 
instead  of  limiting  ownership  to  the  few. 

The  N.  O.  Nelson  Manufacturing  Company  was  on.e 
of  the  pioneers  of  the  profit-sharing  movement  in  this 
country,  having  adopted  plans  in  1886  and  continuing 
them  since  that  time.  The  capital  at  the  beginning 
amounted  to  one  hundred  thousand  dollars  and  the 
employees  numbered  about  two  hundred.  The  capital 
and  surplus  is  now  about  two  million  dollars  and  there 
are  one  thousand  employees. 

Liberal  dividends  have  been  paid,  but  in  the  years 
following  the  panic  of  1893,  dividends  were  suspended; 
they  were  afterwards  regularly  declared  and  a  divi- 
dend of  four  per  cent,  allowed  on  the  years  that  divi- 
dends were  suspended. 

Profit-Sharing  Still  in  its  Infancy. — While  the  suc- 
cess of  profit-sharing  in  many  other  large  concerns 
could  be  quoted,  it  is  believed  that  profit-sharing  is  still 
in  its  infancy  and  in  the  near  future  many  other  pro- 
gressive concerns  will  inaugurate  profit-sharing  plans. 

The  Small  Concern. — Employers  conducting  small 


136  BUYING  BRAINS 

establishments  read  of  profit-sharing  and  conclude  that 
it  is  an  excellent  idea  for  the  large  corporations  to 
adopt  but  fail  to  recognize  the  advantages  it  offers  for 
their  own  business. 

Some  of  the  most  successful  stores  include  a  father 
and  several  sons  who  divide  the  management  and  the 
ownership,  the  customers  of  which  are  certain  to  have 
one  of  the  owners  give  them  the  proper  attention.  If 
the  proprietor  has  no  relatives  with  whom  to  divide 
the  ownership,  there  is  no  good  reason  why  he  should 
not  have  his  clerks  feel  that  they  are  part  of  the  man- 
agement and  take  a  real  interest  in  the  welfare  of  the 
business,  receiving  in  return  a  share  in  the  profits. 

Its  Advantage  to  a  Small  Concern. — The  decided 
advantage  that  profit-sharing  will  prove  to  a  small  mer- 
chant is,  that  ''his  clerk  of  to-day  is  likely  to  be  his 
competitor  of  to-niorrow/'  Offer  him  a  share  of  the 
responsibility  and  pay  him  a  portion  of  the  profits  and 
he  will  be  content  to  remain  with  you. 

The  Ambitious  Employee. — Owing  to  the  fact 
that  the  capital  required  to  open  a  small  store  need 
not  be  large,  the  employee,  out  of  his  savings,  inherit- 
ance or  ability  to  borrow,  soon  becomes  ambitious  to 
have  his  name  over  a  door  and  immediately  proceeds 
to  take  the  patrons  away  from  his  former  employer. 
In  the  majority  of  instances  he  is  unable  to  succeed 
for  lack  of  capital,  or  for  various  reasons,  still  he  has 
remained  in  business  long  enough  to  dissipate  his 
money  and  attract  sufficient  trade  from  his  former  em- 
ployer to  make  that  business  less  profitable. 

A  share  of  the  profits  will  frequently  retain  the  ser- 
vices of  valuable  employees  and  prevent  destructive 
competition,  thereby  saving  loss  of  profits,  probal^le 


PROFIT-SHARING  137 

loss  to  the  employees  (who  become  proprietors  for  a 
short  period)  and  in  many  instances  loss  to  the  whole- 
saler. 

Wasteful  Competition. — There  are  too  many  small 
stores  and  the  wasteful  competition  not  only  keeps 
them  small,  but  produces  innumerable  failures  and  dis- 
appointments. It  is  not  uncommon  to  see  four  or  five 
stores  in  a  single  block  catering  to  a  similar  patronage 
in  the  same  line,  all  of  whom  have  a  hard  struggle  for 
existence.  If  they  were  combined  they  would  have  a 
profitable  business  that  would  not  only  repay  the  in- 
terest on  the  capital  invested,  but  leave  a  handsome 
profit  to  be  divided  among  the  various  proprietors  and 
worthy  employees. 

The  majority  of  small  merchants  pay  dearly  for 
their  independence,  give  little  attention  to  their  homes 
and  are  usually  involved  in  debt;  are  constantly  wor- 
ried and  receive  only  a  bare  living  from  the  business, 
which  represents  mere  wages  and  not  even  the  interest 
on  the  capital  invested. 

The  Cause. — The  unfair  attitude  of  employers  is 
the  strongest  force  in  the  driving  of  men  into  business 
frequently  when  they  are  not  mentally,  physically  or 
financially  equipped  to  conduct  business  successfully. 
A  small  merchant  will  grow  when  he  allows  the  em- 
ployees surrounding  him  to  grow  with  him.  The  most 
successful  men  who  made  millionaires  out  of  some  of 
their  former  employees  did  not  sacrifice  their  indi- 
vidual profits  but  gained  additional  revenue  by  win- 
ning the  support  of  the  right  types  of  men. 

Initiative  Will  Find  Its  Way. — One  cannot  expect 
an  ambitious,  able  person  to  be  satisfied  very  long  with 
a  mere  wage,  and  you  cannot  afford  to  have  a  valuable 


138  BUYING  BRAINS 

employee  leave  and  become  one  of  your  competitors. 
His  services  can  be  retained  and  his  ambition  satisfied 
v^hen  permitted  to  feel  that  he  is  part  of  the  concern 
and  is  given  a  small  portion  of  the  profits  he  creates. 

Logic. — The  volume  of  business  can  frequently  be 
increased  25  to  30  per  cent,  without  materially  in- 
creasing the  expenses,  yet  this  increase  may  more  than 
double  the  profits.  If  the  right  type  of  employees  are 
retained  (and  are  interested  in  their  work)  it  is  an 
easy  matter  to  steadily  increase  a  business  through 
courtesy,  rendering  service  and  having  the  employees 
take  a  personal  interest  in  the  management  and  patrons. 

Pension  Funds. — A  number  of  the  larger  corpora- 
tions contribute  annually  toward  pension  funds.  This 
is  regarded  by  many  as  profit-sharing  yet  it  contains 
elements  that  are  diametrically  opposite  to  the  princi- 
ples of  profit-sharing.  The  pension  system  influences 
employees  to  remain  with  a  concern  even  though  they 
become  dissatisfied  with  the  management,  but  profit- 
sharing  has  a  tendency  to  retain  the  services  of  em- 
ployees by  making  them  satisfied. 

Fixed  Percentage. — Some  concerns  distribute  a 
fixed  percentage  of  the  salary  annually ;  several  of  them 
have  abandoned  this  practice  as  employees  expect  to 
receive  the  stated  amount  regularly,  regardless  of  their 
efforts.  Frequently,  this  does  not  act  as  an  incentive 
to  have  the  employees  produce  their  maximum  results. 

The  Most  Successful  Method. — Of  the  various 
forms  of  profit-sharing  introduced,  the  distribution  of 
dividend-paying  stocks  has  been  the  most  successful, 
because  employees  owning  stock  become  vitally  inter- 
ested in  the  company  and  are  ambitious  to  help  increase 
the  amount  of  dividends.    Precaution  should  be  taken 


PROFIT-SHARING  139 

that  the  minority  of  stockholders  do  not  cause  em- 
barrassment to  the  management,  and  that  the  stock  be 
redeemed  if  the  employee  leaves  the  concern. 

Part  Cash,  Part  Stock. — A  fixed  percentage  of  the 
profits  payable  in  part  cash  and  part  stock  is  an  excel- 
lent plan,  the  employee  receiving  additional  cash  to 
defray  unusual  expenses  or  to  place  the  cash  on  de- 
posit for  emergency,  thus  being  able  to  see  a  tangible 
reward.  The  stock  that  he  secures  makes  him  doubly 
anxious  to  perform  his  work  conscientiously. 

Another  Plan. — Another  plan  is  to  distribute  a  per- 
centage of  the  profits  in  cash.  This  will  appeal  to  the 
employer  who  does  not  care  to  have  employees  enjoy 
the  rights  of  a  stockholder  and  will  please  the  em- 
ployees who  prefer  handling  and  investing,  in  their 
own  way,  the  profits  received.  It  is  true  many  illit- 
erate employees  do  not  comprehend  stock  transactions 
and  to  such  it  is  preferable  to  give  a  bonus  payable 
each  pay  day. 

Resume. — It  should  be  remembered  that  profit- 
sharing  is  not  a  scheme ;  it  is  purely  a  business  transac- 
tion between  the  employer  and  the  employees.  It  is 
unnecessary  to  have  a  lengthy  contract  with  needless 
restrictions.  It  should  not  contain  clauses  that  have 
loopholes  or  features  appearing  in  small  print.  A 
profit-sharing  plan  should  be  a  simple,  fair  and  equi- 
table agreement;  an  understanding  between  the  em- 
ployer and  the  employee  to  divide  the  profits. 

-  The  owners  should  receive  the  large  portion  of  the 
profits  in  return  for  the  capital  invested  and  their 
guidance,  and  the  employees  are  entitled  to  a  minor 
portion  for  their  co-operation  and  faithful  services. 


CHAPTER   VIII 

WELFARE 

TXT' ELF  ARE  work,  like  profit-sharing,  is  a  poor 
^^  substitute  for  equitable  wages  and  fair  treat- 
ment. 

Welfare  work  should  be  an  additional  advantage — 
it  cannot  take  the  place  of  a  square  deal. 

There  is  a  realization  that  the  average  employee 
does  not  secure  for  himself  the  proper  recreation,  there- 
fore the  capitalists  and  employers  are  attempting  to 
plan  and  finance  pleasures  for  him.  While  welfare 
work  has  been  condemned  by  those  who  have  believed 
that  the  cost  of  it  has  been  deducted  from  the  wages, 
or  could  be  added  to  the  compensation,  many  of  the 
acts  regarded  as  welfare  work  are  in  reality  rights 
and  justice  due  employees. 

Some  employers,  especially  those  catering  directly 
to  the  consumer,  have  advertised  their  welfare  work. 
This  has  a  tendency  to  make  the  employees  regard  it 
as  charity  received  from  the  employer  of  whom  they 
may  not  have  the  highest  opinion. 

While  the  motives  of  such  concerns  are  naturally 
questioned,  it  is  generally  admitted  that  welfare  work 
has  been  beneficial  to  employees  and  has  helped  to 
create  a  better  feeling  toward  the  employer. 

Radical  Criticism. — The  radical  labor  leaders  criti- 
cise welfare  work,  claiming  that  it  prevents  strikes.  If 
it  does  this  without  sacrificing  the  rights  of  employees 
it  is  most  commendable.  Before  giving  consideration 
to  the  employees'  lunch  hour  and  evenings,  it  is  well 

140 


WELFARE  141 

to  make  the  working  conditions  as  enjoyable  as  pos- 
sible. 

Some  employees  are  glad  to  be  at  work,  the  work- 
ing conditions  being  more  inviting  and  preferable  to 
their  living  conditions,  while  in  other  instances  it  is 
quite  the  reverse. 

Personal  Equation. — Greet  your  employees  in  the 
morning  with  a  pleasant  word  and  a  smile;  it  is  con- 
tagious and  your  leading  employees  will  follow  your 
example.  If  you  see  an  employee  in  a  public  place,  or 
meet  him  socially,  do  not  attempt  to  evade  him  or  fail 
to  recognize  him.  It  is  absurd  to  annoy  employees  and 
worry  them  into  sickness  and  then  attempt  to  play 
the  "Good  Samaritan." 

After  granting  your  employees  equitable  wages, 
proper  working  conditions  and  fair  treatment,  if  you 
are  sufficiently  interested  in  their  welfare,  you  can 
materially  help  to  make  their  lunch  hour,  recreation 
and  living  more  enjoyable. 

In  every  concern  there  are  individual  cases  which 
require  special  attention  and  speedy  assistance,  and 
when  you  or  your  representative  investigate  such  cases 
and  furnish  the  needed  relief,  it  is  not  only  appre- 
ciated by  the  individual,  but  by  all  the  employees. 
Right  here  is  a  close  bond  of  sympathy  between  all  of 
them  that  makes  for  loyalty.  The  most  praiseworthy 
assistance  is  that  extended  from  one  employee  to  an- 
other. In  times  of  emergency  an  employee  willingly 
sacrifices  necessities  and  personal  comforts  so  that  he 
may  relieve  the  distress  of  a  fellow-workman.  Many 
employers  will  tell  you  that  there  is  no  sentiment  in 
business,  and  business  cannot  be  conducted  as  a  chari- 
table organization.     Employers  in  such  a  frame  of 


142  BUYING  BRAINS 

mind  usually  do  not  grant  the  employees  even  proper 
conditions. 

An  Indirect  Benefit. — Welfare  work  is  helpful  to 
make  employees  healthier,  happier  and  more  efficient, 
and  the  employer  always  receives  an  indirect  benefit. 
The  mental  and  physical  condition  of  employees  is 
reflected  in  the  character  of  their  work.  A  large  per- 
centage of  mistakes  is  the  result  of  a  discontented 
mind.  Many  accidents  are  caused  by  employees  when 
they  become  fatigued  or  dissatisfied.  If  employees  re- 
ceive proper  nourishment  and  rest  during  their  lunch 
hour,  their  afternoon's  work  will  compare  favorably 
with  that  of  the  forenoon.  If  the  ventilation  is  good 
and  the  environment  pleasant,  the  employees  do  not 
become  depressed  and  tired  but  are  full  of  vim  and 
give  the  benefit  of  their  normal  powers. 

A  number  of  concerns  have  given  welfare  work 
serious  consideration,  and  the  fact  that  it  was  not  only 
inaugurated,  but  has  been  continued  on  a  broader 
scale,  indicates  that  they  have  been  well  pleased  with 
the  result  of  welfare  work  and  its  accomplishments. 

When  smaller  merchants  are  told  of  the  welfare 
work  of  the  larger  concerns  they  frequently  remark 
that  such  work  is  impossible  for  them  to  establish. 
This  may  be  true  to  some  extent,  but  on  the  other  hand, 
there  are  many  practices  of  welfare  that  can  be  insti- 
tuted by  the  smaller  employer  who  comes  in  daily  con- 
tact with  his  employees.  In  some  trades  a  number  of 
the  competing  employers  have  conducted  welfare  work 
jointly  and  with  considerable  success. 

Cleveland  Chamber  of  Commerce. — The  Cham- 
ber of  Commerce  of  Cleveland,  as  far  back  as  1899, 
appointed  a  committee  to  assist  in  bettering  the  rela-. 


WELFARE  143 

tions  between  employer  and  employee.  The  commit- 
tee insisted  that  the  basis  of  all  welfare  work  must  be 
founded  on  fair  wages,  reasonable  hours  and  sanitary 
conditions  for  labor.  The  plans  of  their  work  in- 
cluded the  following  features : 

"General  improvement  in  the  environment  and  sur- 
roundings of  workmen  being  of  greatest  importance." 

*'Clean  windows  and  floors,  light  and  well  ventilated 
workrooms,  and  adequate  sanitary  arrangements, 
forming  the  basis  of  further  improvement.  These 
are  usually  at  small  expense,  but  of  greatest  effec- 
tiveness." 

* 'Dressing  rooms  in  which  employees  may  remove 
clothing  worn  in  the  shop  and  don  that  which  they 
can,  with  self-respect,  wear  in  the  street  or  in  the 
car.     In  these  are  often  found : 

"Individual  lockers  of  wood,  iron  or  steel  wire." 

"Toilet  facilities,  including  well-equipped  lava- 
tories." 

"Baths,  both  shower  and  tub,  where  the  nature  of 
the  work  is  such  as  to  make  them  advisable." 

"Lunch  rooms  in  which  the  employees  can  eat  lunch 
brought  from  home,  or  restaurants,  where  meals  are 
furnished  at  cost  by  the  firm." 

"Rest  rooms  where  the  employees  may  go  after 
lunch  or  in  case  of  sudden  illness." 

"Reading  rooms  and  libraries,  usually  in  connection 
with  the  rest  rooms." 

"Mutual  benefit  associations  in  which  the  payment 
of  regular  dues  on  the  part  of  the  members — a  sum 
often  increased  by  contributions  from  the  firm — in- 
sures, in  case  of  illness  or  death,  a  benefit  to  the  men 
or  their  families." 


144  BUYING  BRAINS 

"Entertainments  and  suppers  given  by  the  firm." 

"Prizes  for  suggestions  as  to  the  business,  or  as 
rewards  for  long  and  faithful  service." 

*'Outings,  picnics  and  classes  in  various  subjects 
pertaining  to  the  business." 

The  efforts  of  the  Chamber  of  Commerce  have  been 
beneficial  to  both  the  employers  and  the  employees,  and 
Cleveland  is  regarded  as  an  ideal  city  for  both  the 
manufacturer  and  the  workman.  With  the  administra- 
tion of  this  welfare  work,  Cleveland  has  surpassed 
other  cities  both  in  wealth  and  population. 

Other  Boards  of  Trade,  Chambers  of  Commerce 
and  organizations  should  adopt  similar  resolutions  and 
assist  its  members  to  inaugurate  welfare  work  intelli- 
gently. 

Isolated  Factories. — Some  of  the  concerns  that 
have  their  factories  located  in  isolated  districts  have 
assisted  their  employees  in  procuring  homes  at  a  low 
cost.  Others  built  homes  and  flat  houses  and  rented 
them  to  employees  at  low  rentals,  giving  the  employees 
an  opportunity  to  live  comfortably  at  little  expense. 

Company  Stores  Unfair. — In  contrast  with  such 
helpful  co-operation,  a  number  of  concerns  conduct 
company  stores,  selling  the  necessities  of  life  to  their 
employees  at  exorbitant  prices.  This  method  of  squeez- 
ing the  workmen  out  of  their  earnings  is  most  abom- 
inable. The  company  stores  should  be  managed  for 
the  convenience  of  the  employees,  and  not  conducted 
for  profit  or  to  satisfy  the  avarice  and  greed  of  the 
employers,  or  any  person  connected  directly  or  indi- 
rectly with  the  management  of  the  industry.  These 
stores  are  in  some  instances  a  necessity  and  should 
not  be  expected  to  pay  the  promoters  more  than  a  nomi- 


WELFARE  145 

nal  dividend.  The  prices  should  be  adjusted  with  that 
object  in  view  and  excessive  profits  should  be  returned, 
in  some  manner,  to  the  employees. 

In  many  of  the  isolated  districts,  the  employees  have 
no  other  source  of  supply  except  the  company  stores, 
and  in  some  factories  where  the  pay  day  is  monthly 
(with  a  week  or  more  intervening  between  the  pay 
roll  period  and  the  pay  day)  it  becomes  necessary  for 
the  workmen  to  use  store  orders  to  provide  the  necessi- 
ties of  life. 

In  such  places  where  outrageous  charges  are  made 
for  house  rentals  in  addition  to  supplies,  it  becomes 
almost  impossible  for  the  workmen  to  save  any  money 
from  their  wages. 

The  customary  plan  is  to  use  "store  orders,"  or 
"O.  K.  slips,"  which  ere  issued  in  accordance  with 
the  wages  due  and  are  only  valid  at  the  company's 
stores.  These  stores,  directly  or  indirectly  owned  by 
the  management,  have  every  advantage  for  profit  with- 
out offering  any  inducements,  with  the  exception  of 
extending  credit  that  is  guaranteed  by  wages  already 
earned. 

One  company  which  was  afterwards  succeeded  by 
another,  with  an  increased  capitalization  out  of  its 
earnings,  started  with  a  capital  of  $75,000.  This  con- 
cern paid  in  dividends  from  1898  to  19 10  nearly  five 
millions  of  dollars  and  had  total  assets  amounting  to 
approximately  $1,400,000. 

This  represents  a  profit  of  over  six  millions  of  dol- 
lars, the  major  portion  of  which  does  not  rightfully 
belong  to  the  promoters.  This  excessive  profit  meant 
suffering  and  sacrifice  to  thousands^  of  employees. 

Should  such  conditions  be  permitted  to  exist?  No 


146  BUYING  BRAINS 

fair-minded  person  or  employee  should  begrudge  em- 
ployers a  just  reward  for  their  energy  and  thrift,  but 
we  should  not  be  contented  to  allow  those  financially 
strong  and  powerful  to  extort  money  in  such  a  manner 
from  the  helpless  workman. 

Bureau  of  Labor  Statistics. — That  you  may  know 
the  kind  of  welfare  work  conducted  by  some  of  the 
leading  concerns  of  the  country,  the  writer  will  not 
confine  the  citing  of  individual  cases,  but  will  include 
a  portion  of  the  statistics  published  in  a  bulletin  issued 
by  the  United  States  Bureau  of  Labor. 

Safety  of  Employees. — The  safety  of  employees  is 
receiving,  annually,  more  attention  from  manufacturers 
in  many  of  the  large  industries  who  have  made  a  scien- 
tific study  of  the  accident  causes,  established  rules  to 
prevent  the  repetition  of  similar  accidents,  safeguarded 
the  machinery,  and  attempted  to  educate  the  employees 
not  only  to  become  more  careful,  but  to  exercise  ex- 
treme care  to  save  the  lives  of  others. 

The  International  Harvester  Company  has  adopted 
standard  guards  for  the  various  machines.  The  emery 
wheels  have  steel  coverings  and  the  operators  must 
wear  glasses  to  protect  their  eyes.  The  foundry  men 
wear  congress  shoes  and  hard  cloth  trousers  to  protect 
the  feet  and  legs  from  burns.  A  pamphlet  of  rules  and 
instructions  printed  in  different  languages  points  out 
the  dangers  of  the  various  machines. 

In  each  plant  a  "safety"  inspector  must  be  appointed 
by  the  superintendent,  who  regularly  inspects  each 
department  to  see  that  the  machinery  is  properly 
guarded  and  that  the  rules  are  enforced. 

Committees  of  Safety  First. — At  the  Wisconsin 
Steel  Company  a  committee  of  three  workmen  is  ap- 


WELFARE  147 

pointed  by  the  superintendent  of  each  department,  to 
make  a  thorough  inspection  of  their  department  and 
to  suggest  any  measures  which  they  think  might  reduce 
accidents.  These  committees  go  over  their  depart- 
ments once  a  month.  The  value  of  these  recommenda- 
tions may  be  judged  by  the  fact  that  out  of  448  sug- 
gestions 404  were  adopted.  Notices  of  accidents  and 
how  they  occurred  are  posted,  and  when  a  workman 
is  disabled  the  committee  investigates  and  makes  sug- 
gestions to  prevent  a  repetition. 

Safeguards. — C.  L.  Close,  Manager  of  the  United 
States  Steel  Corporation's  Bureau  of  Safety,  Sanita- 
tion and  Welfare,  stated  that  "while  the  company 
had  spent  $2,003,712.29  in  safeguarding  against  acci- 
dents in  five  years,  it  had  saved  $4,775,692.64  in  cas- 
ualty expenses,  making  a  net  saving  of  $2,771,980.35." 

These  figures  represent  the  saving  in  dollars  and 
cents  to  the  company  without  consideration  of  the 
increased  efficiency  of  the  employees  when  they  know 
their  lives  are  being  properly  protected  during  the 
performance  of  their  daily  tasks.  It  has  also  meant 
the  saving  of  untold  suffering,  the  lessening  of  widows 
and  orphans  and  the  perpetuation  of  families  whose 
members  were  compelled  to  accept  hazardous  employ- 
ment, that  they  may  provide  for  themselves,  and  those 
dependent  on  them,  the  necessities  of  life. 

Suggestion  Box. — The  anthracite  coal  producers  in 
Pennsylvania  have  posted  notices  offering  cash  prizes 
of  $100  for  those  making  the  best  suggestions  to  re- 
duce accidents.  At  each  colliery  of  the  Lackawanna 
Company  a  box  has  been  placed  marked  "Safety 
First  Suggestions,"  and  a  series  of  committees  are  at 
work  to  carry  out  the  accepted  suggestions. 


148  BUYING  BRAINS 

Safety  books  are  distributed  with  photographic 
illustrations  showing  the  right  and  safe  way,  also 
the  wrong  and  dangerous  method  of  doing  the  various 
work  in  the  mines.  While  it  must  be  admitted  that  a 
great  many  accidents  are  due  to  the  negligence  of  em- 
ployees, workmen  employed  in  dangerous  occupations 
should  have  the  co-operation  of  their  employers  to 
minimize  the  number  of  accidents. 

A  large  number  of  laws  have  been  passed  in  the 
different  States  making  it  necessary  for  the  employers 
to  adopt  such  practices  that  will  protect  the  lives  of 
employees.  Many  of  the  laws  are  constantly  violated 
either  through  ignorance  of  existing  laws  or  by  a  de- 
sire for  a  financial  saving  of  expense  which  these  laws 
would  entail. 

i  Yearly  Accidents. — The  importance  of  tlie  ques- 
tion of  the  prevention  of  accidents  may  be  judged  by 
the  fact  that  in  the  various  occupations  there  are  ap- 
proximately 25,000  fatal  accidents  a  year  and  about 
300,000  serious  injuries.  A  large  percentage  of  ac- 
cidents is  caused  toward  the  end  of  the  day,  during 
overtime  work  or  when  one  is  fatigued.  Employees 
should  not  be  permitted  to  do  dangerous  work  for  a 
long  period  without  proper  rest. 

I  Hours  of  Labor. — The  hours  of  labor  is  a  most 
important  question.  A  great  many  accidents,  consid- 
erable sickness  and  permanent  diseases  are  often  the 
result  of  overtaxing  the  mental  and  physical  strength. 
Night  work  or  extra  hours  should  be  avoided  when- 
ever possible.  The  work  done  in  the  after  hours  is 
inferior  and  that  done  the  following  day  is  negatively 
affected. 
I     Additional  employees  for  a  rush  period  are  usually 


WELFARE  149 

more  economical  and  profitable  to  employers  and  it  is 
beneficial  to  the  regular  employees. 

When  a  New  York  State  senator  advocated  the 
amendment  of  a  law  that  permitted  women  and  chil- 
dren in  the  canning  industry  to  work  exceptionally 
long  hours  during  the  canning  season,  he  took  the  oc- 
casion to  criticise  the  Brooklyn  Rapid  Transit  for 
working  their  men  twelve  hours  a  day,  eighty-four 
hours  a  week,  unless  the. men  wanted  to  take  a  day  off 
at  their  own  expense. 

Maryland  Statistics. — According  to  a  recent  report 
of  the  Maryland  Bureau  of  Statistics  and  Labor  in 
Baltimore,  the  city  of  the  writer's  birth,  over  10,000 
children  were  licensed  to  work ;  more  than  half  of  them 
were  said  to  be  girls.  It  is  pitiful  that  children  are 
compelled  to  work  before  they  are  physically  and  men- 
tally equipped.  It  is  also  unfortunate  when  employees 
are  required  to  overtax  themselves  beyond  their 
strength  and  vitality. 

Book  of  Rules  on  Health. — The  Department  of 
Health  of  the  City  of  New  York  published  and  dis- 
tributed booklets  containing  suggestions  for  the  bet- 
terment of  the  health  of  both  indoor  and  outdoor 
workers.  They  recommend  breathing  fresh  air,  having 
light  properly  placed,  and  working  in  such  a  position 
not  to  let  one's  body  become  deformed.  They  also 
mentioned  the  requirements  of  rest,  recreation  and 
physical  exercise,  the  proper  food  and  nourishment  and 
the  avoidance  of  the  * 'bracer"  at  noon. 

Ventilation. — The  ventilation  of  a  factory  is  very 
important  to  the  workers  where  so  many  are  employed 
breathing  the  same  air,  and  especially  so  in  certain 
industries  where  there  is  considerable  dust  and  in  some 


ISO  BUYING  BRAINS 

instances  the  atmosphere  is,  in  fact,  ahnost  poisonous. 

The  Brown  &  Sharpe  Manufacturing  Company,  of 
Providence,  has  the  work  rooms  artificially  ventilated, 
the  air  being  changed  every  forty  minutes.  The  emery 
wheels  are  supplied  with  blow  pipes. 

The  Shredded  Wheat  Company  at  Niagara  Falls 
has  a  system  of  ventilation  that  changes  the  air 
throughout  the  entire  building  every  fifteen  minutes. 
They  do  not  have  a  crowded  work  room  and  they 
make  the  working  conditions  as  comfortable  as  pos- 
sible. 

In  New  York  there  is  a  law  which  reads :  *'The 
owner,  agent  or  lessee  of  every  factory  shall  provide, 
in  each  room  thereof,  proper  and  sufficient  means  of 
ventilation  by  natural  or  mechanical  means  or  both, 
as  may  be  necessary,  and  shall  maintain  proper  and 
sufficient  ventilation  and  proper  degrees  of  tempera- 
ture and  humidity  in  every  work  room  thereof,  at  all 
times  during  working  hours."  A  provision  is  also 
made  that  *'if  impurities  are  generated  or  released  in 
the  course  of  the  business  carried  on  in  any  quantities 
tending  to  injure  the  health  of  the  operators,  the  owner 
or  lessee  should  provide  suction  devices  that  will  re- 
move these  impurities  from  the  workroom." 

A  very  small  percentage  of  the  employers  in  the 
State  know  that  such  a  law  was  enacted  and  a  visit 
to  many  of  the  factories  will  convince  you  that  what 
is  most  needed  is  not  the  passing  of  a  number  of  laws 
but  more  attention  to  the  obedience  to  many  excellent 
laws  already  written  on  our  statute  books. 

Temperature. — During  a  summer  when  one  of  the 
proprietors  of  a  large  factory  purchased  a  number  of 
electric  fans  his  partner  considered  him  extravagant 


WELFARE  151 

for  the  amount  of  money  he  had  expended.  Within 
a  few  weeks  the  concern  had  been  repaid  for  the 
amount  of  the  expenditure  by  receiving  more  and  bet- 
ter work  from  the  operators.  The  employees  also 
appreciated  the  thought  fulness  of  their  employers  and 
were  naturally  in  a  pleasant  frame  of  mind  through- 
out the  season. 

Comforts  of  Employees. — Considerable  attention 
in  many  concerns  is  given  to  the  comfort  of  the  em- 
ployees, not  only  providing  rest  rooms  for  the  lunch 
hour,  but  which  are  visited  by  employees  in  many  es- 
tablishments that  have  rest  periods  once  or  twice  a 
day.  In  some  factories  employees  are  occasionally 
taken  sick  and  proper  care  should  be  given  them.  This 
is  not  only  appreciated  by  the  one  who  is  ill,  but  is  quite 
a  relief  to  the  other  workers  to  know  that  their  co- 
worker is  receiving  the  necessary  attention. 

The  Sick  Room. — The  National  Cash  Register 
Company,  of  Dayton,  Ohio,  has  a  hygienic  department 
of  four  rooms,  under  the  charge  of  a  physician  who 
comes  one  hour  a  day.  A  nurse  and  assistant  are  in 
attendance  constantly.  The  physician  examines  all 
applicants  for  employment,  which  prevents  the  spread 
of  contagious  disease,  as  well  as  having  employees  do- 
ing work  that  they  are  not  physically  able  to  perform. 

Ideal  Conditions. — William  Filene's  Sons  Com- 
pany, of  Boston,  is  regarded  as  an  ideal  department 
store  for  employees.  The  comforts  for  the  employees 
are  usually  decided  upon  and  managed  by  the  em- 
ployees. They  have  allotted  space  liberally  for  recrea- 
tion, lunch  room,  a  smoking  room  with  games  for  men, 
a  library  and  a  dance  room.  The  Health  Committee 
has  charge  of  the  health  of  the  employees.    Two  physi- 


152  BUYING  BRAINS 

cians  come  twice  a  week  and  employees  may  consult 
them  without  expense. 

In  the  warmer  months  many  employees  become  ex- 
hausted unless  proper  provisions  are  made  for  their 
comforts.  You  should  make  your  establishment  a 
pleasant  place  for  the  employees.  They  will  do  their 
work  in  a  superior  manner  if  their  comforts  are  given 
consideration  by  the  management. 

Every  possible  thought  for  the  comfort  of  the  em- 
ployees is  in  evidence  at  the  Curtis  Publishing  Com- 
pany. At  the  entrance  in  the  basement  there  are  lock- 
ers and  cloak  rooms,  an  umbrella  checking  system  and 
an  arrangement  for  drying  damp  clothing  which  pre- 
vents much  sickness. 

At  Marshall  Field  &  Company  there  are  two  medical 
rooms,  one  for  men,  and  the  other  for  women,  in 
charge  of  a  nurse  to  attend  those  who  may  be  sud- 
denly taken  ill.  The  nurse  is  often  sent  out  to  take 
care  of  those  who  are  ill  at  home. 

Comfort  Stations. — Ample  toilets  and  lavatories 
convenient  to  the  employees  are  a  necessity.  Most 
concerns,  especially  those  occupying  modern  build- 
ings, have  made  correct  provisions  for  these  rooms. 
In  New  York  State  during  a  single  year,  there  were 
4,621  orders  issued,  of  which  there  were  1,793  orders 
to  clean  them.  A  number  of  them  were  found  to  be 
in  a  filthy  condition,  which  not  only  spread  disease, 
but  their  appearance  made  many  of  the  employees 
abstain  from  using  them. 

The  wash  rooms  seem  to  inspire  the  poets,  scrib- 
blers and  those  of  vulgar  minds  to  deface  the  walls. 
A  notice  appealing  to  their  better  instincts  and  men- 
tioning that  the  rooms  are  maintained  for  their  use, 


WELFARE  153 

will  often  curb  their  literary  ambitions  in  this  direc- 
tion. 

Dressing  Rooms  and  Lockers. — The  work  in  many 
establishments  makes  it  necessary  for  the  employees 
to  change  their  garments  at  the  beginning  and  end  of 
the  day.  Many  concerns  have  suitable  dressing  rooms 
and  lockers,  which  enable  the  employees  to  make  the 
changes.  In  building  a  plant  or  renting  a  space,  proper 
consideration  should  be  given  to  this  subject,  as  em- 
ployees are  justly  entitled  to  proper  accommodations 
for  such  a  purpose. 

Self-respecting  persons  want  to  present  a  neat  and 
clean  appearance  on  the  streets  regardless  of  the  nature 
of  their  employment.  Some  concerns  have  baths  which 
employees  may  use,  which  is  greatly  appreciated  by 
employees,  many  of  whom  do  not  have  satisfactory 
bathing  facilities  at  home. 

Lunch  Rooms  and  Restaurants. — A  number  of  the 
larger  concerns  have  made  liberal  accommodations  for 
employees  in  the  matter  of  lunch  rooms.  While  only 
a  few  serve  lunch  without  charge,  many  of  them 
furnish  it  at  or  below  actual  cost.  There  is  a  consid- 
erable difference  between  the  cost  and  the  prices  usu- 
ally charged  for  a  great  many  dishes.  This  means  a 
daily  saving  to  the  employees  and  at  the  same  time  en- 
sures them  satisfactory  nourishment.  The  lunches 
purchased  under  such  circumstances  are  quite  a  con- 
trast with  those  procured  by  other  employees  earning 
a  similar  amount  who  must  pay  the  customary  prices 
for  their  lunches.  A  proper  lunch  means  not  only 
better  health  to  the  employees,  but  is  also  a  benefit  to 
the  employers  who  thus  have  their  employees  in  a  fit 
condition  to  perform  their  work. 


154  BUYING  BRAINS 

The  Cleveland  Twist  Drill  Company  has  separate 
lunch  rooms  for  men  and  women  where  they  obtain 
food  at  cost.  Periodicals  are  subscribed  for  the  men  ; 
while  a  special  rest  and  recreation  room  is  provided  for 
the  women. 

The  Lowe  Brothers  Company,  of  Dayton,  Ohio, 
furnish  and  operate  a  lunch  room  for  the  women  and 
give  them  coffee  free.  Coffee  is  taken  out  to  the  men 
in  the  shops. 

The  H.  J.  Heinz  Company,  of  Allegheny,  Pa.,  was 
one  of  the  pioneers  in  welfare  work.  This  company 
has  the  walls  of  the  dining-room  covered  with  pictures, 
some  of  which  are  copies  of  famous  paintings.  Here 
coffee  costs  the  female  operators  a  penny  a  day. 

The  Shredded  Wheat  Company  has  a  lunch  room 
equipped  for  the  women  employees  where  a  hot  lunch 
is  given  them.  The  prices  are  stated  on  the  menu  and 
each  employee  is  allowed  to  have  food  to  the  amount 
of  fifteen  cents  free.  The  men  have  a  lunch  counter 
where  they  can  secure  a  luncheon  of  soup,  meat,  po- 
tatoes, dessert  and  coffee  for  ten  cents.  Adjoining 
the  lunch  rooms  there  is  a  large  rest  room  comfortably 
furnished  and  attractive  in  appearance. 

The  Curtis  Publishing  Company  maintain  a  lunch 
room  for  the  women  where  they  may  eat  lunches 
brought  from  home  or  purchase  hot  lunches  at  low 
rates.  The  rest  room  is  handsomely  decorated,  has 
lounging  chairs,  plants  and  fresh  cut  flowers  and  pre- 
sents the  appearance  of  a  hotel  rather  than  a  rest  room 
for  working  girls. 

The  Chicago  Telephone  Company  discovered  that 
the  women  would  not  bring  nor  purchase  suitable 
lunches  and  that  during  the  afternoon  many  mistakes 


WELFARE 


155 


were  made.  The  company  then  started  to  furnish 
wholesome  lunches,  free,  to  the  telephone  operators. 

Libraries  and  Reading  Rooms. — In  many  estab- 
lishments libraries  and  reading  rooms  are  furnished 
the  employees,  where  they  can  spend  the  noon  hour 
comfortably.  In  a  few  instances,  branches  of  public 
libraries  are  connected  with  the  concern  and  the  em- 
ployees are  allowed  to  take  the  books  to  their  homes. 
Some  firms  have  furnished  private  circulating  libraries 
and  permit  the  employees  to  read  books  in  the  rooms, 
or  borrow  them.  This  is  very  commendable  and 
is  especially  helpful  in  smaller  cities  that  have  no  cir- 
culating library. 

The  Curtis  Publishing  Company  has  a  library  with 
a  librarian  in  charge  and  about  one  thousand  books 
are  circulated  each  week. 

Marshall  Field  &  Company  has  a  reading  room 
where  there  are  magazines,  periodicals  and  several 
cases  of  books  for  men  and  women.  The  Chicago 
Public  Library  is  made  accessible  when  the  company 
sign  slips  for  their  employees. 

R.  H.  Macy  &  Company,  of  New  York,  has  about 
one  thousand  volumes  that  have  been  donated  by  the 
members  of  the  firm.  Employees  are  allowed  to  take 
books  home  for  a  week. 

The  Metropolitan  Insurance  Company  maintain,  in 
its  building  at  New  York,  an  extensive  library  con- 
sisting of  five  thousand  volumes  and  each  month  a  bul- 
letin is  published  announcing  the  new  books  received. 

Education. — Circumstances  compel  many  boys  and 
girls  to  start  working  before  they  have  received  suffi- 
cient education  to  be  properly  equipped  for  life's  strug- 
gle.   There  is  a  growing  tendency  on  the  part  of  the 


IS6  BUYING  BRAINS 

more  ambitious  to  study  during  the  evenings;  some 
attempt  to  educate  themselves  while  others  attend  night 
schools.  A  number  of  employers  encourage  the  em- 
ployees to  do  this  while  in  some  of  the  larger  establish- 
ments schools  are  maintained  for  them. 

The  Wanamaker  department  store  of  Philadelphia 
deserves  especial  credit  for  educational  work.  The 
John  Wanamaker  Commercial  Institute  has  a  staff  of 
twenty-five  instructors  who  teach  arithmetic,  geog- 
raphy, law,  business  methods,  etc.  They  conduct 
school  morning  and  evening.  Children  under  sixteen 
years  of  age  are  required  to  attend  school  two  even- 
ings each  week,  their  supper  being  given  to  them  after 
working  hours. 

Athletic  and  Social  Clubs. — The  social  and  club 
life  of  a  great  many  factory  workers  is  rather  limited, 
especially  when  the  factory  is  located  in  the  smaller 
communities.  Some  of  the  employers,  realizing  that 
the  employees  require  recreation  of  the  cleaner  sort, 
have  aided  the  employees  to  organize  clubs  of  different 
kinds.  In  some  instances  the  employers  have  built  the 
club  houses,  donated  the  grounds,  and  subscribe  an- 
nually for  their  maintenance. 

The  United  Shoe  Machinery  Company,  at  Beverly, 
Mass.,  built  a  handsome  country  club  house  at  an 
expense  of  $28,000.  The  building  has  an  auditorium 
with  a  stage,  reading  room,  bowling  alleys,  billiard, 
pool  and  card  rooms.  A  gun  club  and  tennis  courts 
are  located  near  by.  The  membership  fee  is  two  dol- 
lars, which  is  considered  within  the  reach  of  all  the 
employees. 

The  Deering  Works  Club  House  in  Chicago  repre- 
sents an  expenditure  of  $27,000.    For  the  convenience 


WELFARE  :i57 

of  the  employees  there  are  ladies'  rooms,  reception 
hall,  smoking  rooms,  gymnasium  and  an  assembly  hall 
seating  six  hundred  persons.  The  foremen  of  the 
works  arrange  entertainments,  dances,  etc. 

Over  twenty  years  ago,  the  Gorham  Manufacturing 
Company,  near  Providence,  built  for  the  employees  a 
club  house  and  a  casino  was  added  later. 

Picnics  and  Outings. — Annual  picnics  and  outings 
are  growing  more  popular,  and  each  year  are  looked 
forward  to  by  many  of  the  employees  with  much  pleas- 
ure. These  outings  have  a  tendency  to  bring  the  em- 
ployees together  socially,  crystallizing  a  more  friendly 
spirit,  and  making  the  employees  who  occupy  the  lower 
positions  feel  that  once  a  year  all  employees,  regard- 
less of  their  station,  have  an  equal  standing. 

The  H.  J.  Heinz  Company  has  continued  the  cus- 
tom of  having  an  annual  picnic  for  many  years.  On 
that  day  operations  are  suspended  and  about  4,500 
persons  participate  in  the  festivities. 

The  Commonwealth  Edison  Company,  of  Chicago, 
gives  the  women  employees  an  annual  outing  and 
each  employee  may  invite  a  guest.  The  expenses  are 
paid  by  the  company.  In  this  connection  it  may  be  said 
that  many  of  the  concerns  bearing  the  name  of  Thomas 
Edison,  our  great  inventor,  are  unusually  liberal  to 
their  employees. 

Vacations. — A  vacation  is  beneficial  to  the  employee 
and  the  employer  alike,  as  the  vacations  are  taken  in 
the  dull  season  and  do  not  interfere  with  the  running 
of  a  business. 

In  many  establishments  one  or  two  weeks  are  given 
in  accordance  with  the  length  of  employment.  Some 
concerns  through  their  associations  provide  for  inex- 


158  BUYING  BRAINS 

pensive  or  free  board ;  this  is  quite  helpful  to  the  em- 
ployees whose  circumstances  would  not  permit  them 
to  leave  the  city  otherwise. 

The  Lyman  G.  Bloomingdale  Vacation  Fund  fur- 
nishes the  female  employees  of  Bloomingdale  Brothers 
of  New  York  who  have  been  employed  one  year,  a 
week's  board,  wages  and  transportation. 

Marshall  Field  &  Company  give  a  two  weeks'  va- 
cation with  full  pay  to  employees  who  have  been  with 
the  company  for  a  year,  and  one  week  to  those  in  their 
employ  for  six  months. 

R.  H.  Macy  &  Company  of  New  York  has  a  va- 
cation house  at  Central  Valley,  where  employees  who 
have  been  with  the  firm  for  one  year  are  given  a  week's 
holiday  with  full  pay,  transportation  and  board. 

The  Metropolitan  Life  Insurance  Company  give 
each  employee  who  has  been  with  them  one  year,  two 
weeks'  vacation  with  full  pay. 

Savings  Banks. — A  number  of  concerns  have 
started  savings  banks  to  encourage  thrift  and  to  help 
employees  purchase  homes  and,  furthermore,  to  loan 
money  to  those  who  desire  to  borrow. 

While  the  intention  is  well  meant  and  the  benefits 
have  been  very  great  to  many  employees,  in  several 
instances  the  results  have  been  quite  disastrous.  Sev- 
eral of  the  concerns  who  were  not  financially  strong 
invested  part  of  the  savings  in  their  own  enterprises 
and  severe  hardship  was  caused  to  the  employees  who 
lost  their  positions  and  savings  at  the  same  time.  For 
this  reason  it  would  be  preferable  that  the  employees 
deposit  their  savings  in  banks  that  are  subject  to  the 
supervision  of  the  State  banking  laws. 

Benefit  Funds. — Benefit  funds  and  associations  are 


WELFARE  159 

quite  common  in  the  larger  concerns  and  are  being 
started  in  many  of  the  smaller  establishments.  A  num- 
ber of  employees  whose  salaries  do  not  permit  saving 
are  able  to  pay  a  small  amount  each  week,  which  gives 
them  a  weekly  allowance  in  times  of  illness.  Some  of 
the  concerns  help  the  employees  to  manage  these  funds 
while  others  have  started  the  associations  with  a  sub- 
stantial amount,  leaving  the  management  to  the 
employees. 

In  1 88 1,  the  Bloomingdale  Brothers  Mutual  Aid 
Society  was  organized  and  a  number  of  bequests  have 
been  left  to  it  by  the  members  of  the  Bloomingdale 
family.  A  graduated  scale  of  payments  from  the  em- 
ployees was  instituted,  beginning  with  ten  cents  a 
month,  according  to  the  wages  received,  and  the  sick 
and  death  benefits  have  been  helpful  to  the  employees 
of  this  department  store. 

The  employees  of  all  the  Edison  interests  have  or- 
ganized a  mutual  benefit  association  and  have  branch 
associations  at  the  various  plants. 

The  National  Cash  Register  Relief  Association,  sug- 
gested by  the  company  years  ago,  was  assisted  by  the 
company  until  it  became  self-supporting. 

An  Inventory. — References  have  been  made  to  the 
introduction  of  welfare  work  in  the  larger  concerns 
and  it  is  by  no  means  being  confined  to  them.  A 
number  of  smaller  concerns  throughout  the  country 
are  also  inaugurating  welfare  work. 

After  having  read  this  chapter,  the  writer  suggests 
that  you  put  the  book  aside  and  take  an  inventory. 
Think  over  the  question  of  welfare,  ask  yourself  what 
you  have  done  during  the  past  year  and  what  you  con- 
template doing  in  the  future  to  make  the  lives  of  your 
employees  more  enjoyable. 


CHAPTER  IX 

UNIONS 

TT  WOULD  be  absurd  to  consider  the  relationship 
-*•  between  the  employer  and  the  employee  or  to  write 
of  the  labor  movement  without  a  discussion  of  the 
unions.  Contrary  to  the  general  impression,  the  his- 
tory of  the  unions  dates  from  the  revolutionary  period. 
Several  were  organized  shortly  after  the  signing  of  the 
Declaration  of  Independence. 

The  Typographical  Union. — In  1800,  the  Typo- 
graphical Association  prepared  the  first  wage  scale  ever 
adopted  and  the  New  York  printers  inaugurated  a 
strike  for  its  enforcement.  The  Association  demanded 
twenty-five  cents  per  1000  ems  for  piece  workers,  at 
least  $7.00  per  week  in  book  and  job  offices  and  $8.00 
per  week  on  newspapers.  On  July  5,  1802,  in  com- 
memoration of  the  third  anniversary  of  the  Associa- 
tion, Thomas  Ringwood  delivered  an  address  before 
the  Franklin  Typographical  Organization  which  in- 
cluded the  following : 

"Our  institution  is  in  a  much  more  flourishing  state 
than  its  warmest  friends  could  have  expected.  In  its 
infancy  it  had  many  difficulties  to  encounter,  but  its 
members,  by  a  persevering  spirit  and  propriety  of  con- 
duct, have  rendered  futile  every  obstruction  opposed 
to  it  in  its  progress  to  maturity,  and  we  may  now  con- 
sider it  as  established  on  a  basis  so  firm  as  to  warrant 
the  most  sanguine  hopes  of  its  durability." 

Relief  of  Its  Members. — "The  organization  of  a 
society  which  has  for  one  of  its  primary  objects  the 

160 


UNIONS  i6i 

relief  of  its  members  when  distressed  will  be  allowed 
by  all  to  be  a  laudable  undertaking,  as  there  is  no  situ- 
ation in  life  which  secures  us  from  the  arrows  of  ad- 
versity; to-day  we  may  be  blessed  with  the  enjoyment 
of  perfect  health,  to-morrow  we  may  be  laid  on  a  bed 
of  sickness.  Unforeseen  events  may  incapacitate  us  to 
meet  such  a  misfortune  in  a  suitable  manner ;  it  there- 
fore behooves  us  to  make  some  provision  as  a  shield 
against  calamity,  and  in  what  way  can  it  be  better 
done  than  by  associating  in  the  bonds  of  friendship  and 
brotherly  love?" 

''Well  regulated  societies  also  have  a  tendency  to 
correct  and  guide  the  conduct  of  their  members,  both 
in  moral  and  professional  points  of  view  and  in  jus- 
tice to  our  employers,  as  well  as  to  ourselves,  is  the 
professional  tenet  of  our  constitution.  Great  care 
should  be  taken  to  adhere  to  it  strictly,  as  our  associa- 
tion will  thereby  support  that  credit  which  it  has  grad- 
ually been  attaining  since  its  estabHshment." 

No  Evil  Impression. — "I  believe  I  may  with  truth 
affirm  that  our  conduct  has  effectually  obliterated  any 
evil  impression  which  might  have  been  entertained 
against  us  as  a  society.  We  have  clearly  evinced  that 
we  associated  not  for  the  purpose  of  extorting  extraor- 
dinary salaries,  but  from  motives  widely  different,  and 
it  remains  with  ourselves  to  maintain  the  ground  we 
have  gained,  or  deviate  from  the  line  of  conduct  we 
have  hitherto  pursued  and  fall  into  discredit." 

"From  truly  laudable  and  patriotic  spirit,  we  are 
warranted  in  cherishing  the  expectation  that  the  art 
of  printing  will  shortly  arrive  to  a  degree  of  eminence 
in  America  equal  (at  least  comparatively)  to  what  has 
arisen  in  Europe." 


i62  BUYING  BRAINS 

''We  are  now,  brethren,  a  numerous  society;  let  us 
endeavor  to  conciliate  the  esteem  of  our  employers; 
let  us  continue  to  be  united  as  we  have  heretofore  been 
and  we  shall  soar  above  the  malevolent  attacks  of  any 
who  may  from  principle  or  prejudice,  profess  them- 
selves our  enemies." 

It  is  to  be  regretted  that  the  thoughts  so  eloquently 
expressed  over  a  century  ago  should  not  serve  as  a 
guide  for  the  action  of  the  unions  of  to-day.  In  the 
early  half  of  the  nineteenth  century  a  number  of 
unions  and  associations  were  organized  but  the  modern 
labor  movement  had  its  inception  in  the  closing  days 
of  1849. 

Others  Organize. — During  the  spring  of  the  fol- 
lowing year,  a  number  of  associations  were  launched 
and  the  labor  movement  began  to  attract  considerable 
attention.  On  June  5,  1850,  a  central  association  called 
the  Industrial  Congress  was  established  and  83  dele- 
gates from  50  organizations  were  present,  with  the 
object  of  extending  the  activity  of  labor.  Masons 
were  receiving  $1.50  per  day  until  185 1,  but  on  March 
26th  the  members  were  ordered  not  to  work  for  less 
than  $2.00  after  the  fourteenth  of  April.  The  em- 
ployers Conceded  the  increase  and  a  few  weeks  later 
the  masons  marched  through  the  principal  streets  of 
New  York  to  celebrate  the  occasion. 

Practical  House  Painters'  Benefit  and  Protective 
Society  was  organized  on  March  19,  1850.  The  Gas 
Fitters  held  a  preliminary  meeting  April  22,  1851; 
The  Stone  Cutters'  Union  started  June  28,  1850;  The 
Journeyman  Tailors'  Union  first  met  in  March,  1850, 
and  five  months  after  had  a  membership  of  2500.  .'The 
Steam  Boiler  Makers,  The  United  Order  of  Manu- 


UNIONS  163 

facturing  Jewelers,  The  Cabinet  Makers,  The  CoacH 
Painters,  The  Dry  Goods  Clerks'  Mutual  Benefit  and 
Protective  Association,  and  many  other  organizations, 
representing  almost  every  important  industry,  were 
formed  during  this  period.  While  unionism  has  ex- 
isted for  many  years,  the  prevailing  types  of  men  con- 
trolling the  unions  were  entirely  different  in  the  earlier 
periods.  The  unions  were  inclined  to  be  reasonable 
in  their  demands  and  the  employers  generally  met  their 
requests  in  a  fair  manner. 

The  present  relationship  between  the  employer  and 
the  employee  is  totally  different,  each  party  appearing 
to  disregard  the  rights  of  the  other.  The  union  de- 
mands as  much  as  possible  for  the  workmen  and  the 
employers  consider  it  good  business  not  to  pay  a 
higher  wage  than  is  absolutely  necessary. 

Destructive  Methods. — The  programmes  of  the 
earlier  unions  were  constructive.  Many  of  the  unions 
now  teach  destructive  methods.  Without  the  union, 
the  employees  are  at  the  mercy  of  the  employers.  The 
more  capable  workmen  would  prefer  leaving  their  in- 
terests in  the  hands  of  the  employers  provided  they 
would  be  treated  fairly.  When  a  scale  of  wages  is 
prepared  for  a  group  of  employees,  regardless  of 
ability,  the  efficient  workman  is  the  loser  thereby. 
Unions  have  come  to  stay  and  while  in  a  number  of 
industries  they  may  not  gain  a  foothold  or  retain  their 
present  strength,  they  will  always  be  an  important  fac- 
tor in  the  labor  movement. 

How  to  Eliminate  the  Unions. — To  keep  union- 
ism out  of  your  establishment,  have  your  employees 
thoroughly  contented.  Grant  the  employees  proper 
working  conditions,  pay  them  fair  wages,  adjust  the 


1 64  BUYING  BRAINS 

differences  and  misunderstandings  that  may  occur  and 
treat  your  workmen  with  a  humane  spirit.  Do  not 
compel  your  employees  to  leave  their  unions,  but  volun- 
tarily establish  such  relations  with  them  that  they  will 
ncft  permit  their  unions  to  stir  unnecessary  strife. 

The  best  arguments  in  favor  of  scientific  manage- 
ment and  welfare  work  are,  that  it  has  been  stated 
that  a  few  of  the  union  officials  are  opposed  to  such 
movements,  as  they  have  a  tendency  to  make  the  work- 
men disregard  the  demands  of  the  unions.  In  justice 
to  the  unions  they  must  be  given  credit  for  many  of 
the  improved  working  conditions  that  have  been  help- 
ful to  the  workmen  and  have  proved  of  material  ad- 
vantage to  the  employer. 

Credit  Due  the  Unions. — Reasonable  working 
hours,  sanitary  workrooms  and  many  other  industrial 
reforms  should  be  credited  to  the  cause  of  the  union. 
Unions  properly  administered  are  not  only  a  protec- 
tion to  the  workmen,  but  they  safeguard  the  interests 
of  the  fair-minded  employer. 

The  reputable  concerns  paying  fair  wages  for  a  rea- 
sonable number  of  hours  would  find  it  difficult  to  com- 
pete with  concerns  who  would  underpay  their  work- 
men and  compel  them  to  work  a  greater  number  of 
hours. 

What  the  Public  Demands. — The  union  officials 
must  recognize  that  it  is  improper  for  them  to  make 
excessive  demands,  that  the  public  sentiment  is  opposed 
to  violence,  and  the  workmen  should  be  allowed  to 
deliver  their  maximum  ability ;  also  that  strikes  should 
be  avoided  whenever  possible. 

The  members  of  the  unions  must  select  as  officials, 
men  who  are  worthy  of  respect  and  such  types  that 


UNIONS  165 

will  deal  fairly  with  the  members  as  well  as  with  the 
employers. 

The  Fair  and  Square  Deal. — The  unions  should 
not  demand  unreasonable  wages  for  inferior  workmen, 
but  should  devise  ways  and  means  and  adopt  plans  to 
instruct,  train  and  develop  workmen  who  will  become 
efficient  and  justly  entitled  to  higher  wages.  The 
unions  have  the  opportunity  to  help  the  workmen  and 
make  them  acceptable  to  the  employers,  the  majority 
of  whom  do  not  object  to  paying  union  wages  if  they 
receive  the  equivalent  in  services  rendered. 

Let  it  be  here  understood  that  employers  are  not 
fighting  the  unions ;  they  are  fighting  the  principles  or 
lack  of  them.  There  seems  to  be  no  satisfactory  solu- 
tion of  the  labor  problem;  no  equitable  division  of  the 
income  of  industry  between  those  who  control  the 
industries  and  the  men  and  women  who  perform  the 
work. 

The  employers  claim  that  the  workmen  demand  too 
much  and  accomplish  too  little;  the  employees  think 
that  too  much  is  expected  of  them  for  the  compensa- 
tion they  receive. 

There  is,  in  many  establishments,  a  feeling  of  an- 
tagonism and  distrust.  The  employees  do  not  furnish 
their  maximum  ability  and  the  employers  are  unwilling 
to  be  more  liberal,  believing  that  they  are  being  im- 
posed upon  by  the  workmen.  Employees  are  com- 
pelled to  work  for  a  livelihood;  employers  require 
workmen  to  carry  on  their  business.  The  two  are  de- 
pendent upon  each  other ;  the  success  of  the  one  should 
be  the  success  of  the  other.  Why  not  settle  their  dif- 
ferences equitably  and  peaceably  ?  Strikes  are  ordered, 
employers  suffer  financial  losses  which  are  frequently 


i66  BUYING  BRAINS 

beyond  recovery,  and  their  inability  to  meet  obliga- 
tions indirectly  affects  others  who  had  no  voice  in  the 
strife. 

Both  at  a  Loss. — Employees  usually  suffer  even 
more  than  the  employers.  They  often  forfeit  every 
asset  they  possess,  their  savings  and  their  positions, 
and  not  only  suffer  financially  but  frequently  are  de- 
prived of  the  necessities  of  life.  The  saddest  part  of 
these  conflicts  is  the  agony  and  suffering  of  those  de- 
pendent upon  the  workmen;  the  wives  and  little  ones 
must  undergo  this  terrible  ordeal,  though  they  have 
no  vote  in  the  unfortunate  affair.  After  weeks  and 
months  of  this  dreadful  loss  of  money,  energy  and 
often  lives,  the  two  parties  realize  that  they  are  depend- 
ent upon  each  other  and  frequently  arbitrate  their 
differences.  The  workmen  are  happy  to  return  to 
their  work,  the  employers  are  anxious  to  resume  busi- 
ness, and  both  are  in  a  weakened  condition  with  an 
un  forgotten  hatred  towards  each  other. 

Arbitration. — If  an  employee  only  wants  what  is 
reasonable,  and  an  employer  is  willing  to  deal  fairly, 
why  not  arbitrate  their  disputes  without  this  dreadful 
waste?  A  community  will  not  permit  individuals  to 
disturb  the  peace;  society  will  not  accept  a  man  who 
plays  unfair  in  sports.  Why,  then,  should  a  com- 
munity countenance  continuous  labor  disturbances? 
Why  should  society  allow  its  members  to  deal  unfairly 
with  the  less  fortunate  and  helpless  workmen  ? 

According  to  the  laws  in  most  of  our  States,  nothing 
can  be  done  by  the  Labor  Bureau  unless  the  parties 
in  dispute  signify  their  willingness,  excepting  in  such 
cases  that  affect  the  public  service,  and  even  in  this 
respect  its  powers  are  Hmited.     If  transportation  is 


UNIONS  167 

stopped  or  becomes  curtailed,  the  officials  show  signs 
of  activity,  but  when  fuel,  ice  and  other  necessities 
are  affected  by  a  strike,  the  officials  consider  that 
their  hands  are  tied. 

The  labor  commissioners  in  the  various  States  should 
be  granted  greater  authority  and  should  utilize  it  to 
reduce  the  labor  conflicts.  Making  investigations  and 
preparing  reports  is  interesting  reading  matter,  but  the 
most  important  duty  of  a  labor  bureau  should  be  the 
elimination  of  the  greatest  wastes,  the  settling  of  dis- 
putes between  capital  and  labor.  Conciliation  and 
arbitration  is  the  only  answer  to  these  terrible  strikes 
and  lockouts;  fair  opportunity  to  adjust  the  disputes 
and  exposure  of  the  unfair  and  unjust  whether  it  be 
the  workmen  or  the  employers. 

The  Influence  of  Public  Sentiment. — Public  senti- 
ment has  a  more  important  influence  in  our  transac- 
tions each  year;  the  millionaires  and  industrial  giants 
who  defied  the  public  ten  years  ago  are  now  spending 
their  money  and  efforts  to  crystallize  favorable  public 
opinion. 

Workmen  who  were  willing  to  be  led  in  their  unions 
are  beginning  to  think  for  themselves ;  they  read  papers 
and  magazines  and  are  inclined  to  be  more  reasonable. 

In  the  year  ending  September,  191 3,  there  were 
268  strikes  and  lockouts  in  New  York  State  alone,  in- 
volving 286,180  workmen  who  lost  7,709,525  working 
days.  This  tremendous  waste  should  not  only  awaken 
the  citizens  of  New  York  State  and  elsewhere  to  avoid 
such  a  calamity,  biit  it  should  shock  the  capitalists 
and  the  working  classes  of  the  nation. 

While  some  of  the  disputes  were  settled  through 
the  assistance  of  the  Labor  Department  of  that  State, 


i68  BUYING  BRAINS 

many  of  them  should  have  been  arbitrated,  and  most 
of  the  strikes  could  have,  and  should  have,  been 
avoided. 

While  it  must  be  admitted  that  in  Massachusetts 
during  the  year  19 13,  there  were  321  strikes  affecting 
30,000  workmen,  these  numbers  would  have  been 
greater  had  it  not  been  for  the  activities  of  the  State 
Board  of  Conciliation  and  Arbitration. 

In  attempting  to  solve  the  labor  question,  the  law 
of  conciliation  and  arbitration  adopted  in  Massachu- 
setts is  a  progressive  step  and  it  is  hoped  that  other 
States  will  enact  similar  laws  and  improve  them  if 
possible. 

The  State  Board. — The  Massachusetts  laws  include 
the  following  provisions :  "Section  10 :  There  shall  be 
a  State  Board  of  Conciliation  and  Arbitration  con- 
sisting of  three  persons  one  of  whom  shall,  annually, 
in  June,  be  appointed  by  the  Governor,  with  the  advice 
and  consent  of  the  council,  for  a  term  of  three  years 
from  the  first  day  of  July  following.  One  member  of 
said  board  shall  be  an  employer,  or  shall  be  selected 
from  an  association,  representing  employers  of  labor. 
One  shall  be  selected  from  a  labor  organization,  and 
shall  not  be  an  employer  of  labor,  and  the  third  shall 
be  appointed  upon  the  recommendation  of  the  other 
two,  or  if  the  two  appointed  members  do  not,  at  least 
thirty  days  prior  to  the  expiration  of  a  term,  or  within 
thirty  days  after  the  happening  of  a  vacancy,  agree 
upon  the  third  member,  he  shall  then  be  appointed  by 
the  Governor. 

"Each  member  shall,  before  entering  upon  the  duties 
of  his  office,  be  sworn  to  the  faithful  performance 
thereof,  and  shall  receive  a  salary  at  the  rate  of  two 


UNIONS  169 

thousand  five  hundred  dollars  a  year  and  his  necessary 
traveling  expenses  and  other  expenses,  which  shall  be 
paid  by  the  Commonwealth. 

*The  board  shall  choose  from  its  members  a  chair- 
man, and  may  appoint  and  may  remove,  a  secretary  of 
the  board  and  may  allow  him  a  salary  of  not  more  than 
fifteen  hundred  dollars  a  year.  The  board  shall,  from 
time  to  time,  establish  such  rules  of  procedure  as  shall 
be  approved  by  the  Governor  and  Council,  and  shall, 
annually,  on  or  before  the  first  day  of  February,  make 
a  report  to  the  General  Court." 

Strikes  and  Lockouts. — *' Section  11 :  If  it  appears 
to  the  mayor  of  a  city,  or  to  the  selectmen  of  a  town, 
that  a  strike  or  lockout  described  in  this  section  is 
seriously  threatened  or  actually  occurs,  he  or  they  shall 
at  once  give  notice  to  the  State  Board,  and  such  notice 
may  be  given  by  the  employer,  or  by  the  employees 
concerned  in  the  strike  or  lockout.  If,  when  the  State 
Board  has  knowledge  that  a  strike  or  lockout,  which 
involves  an  employer  and  his  present  or  former  em- 
ployees is  seriously  threatened  or  has  actually  occurred, 
such  employer,  at  that  time,  is  employing,  or  upon  the 
occurrence  of  the  strike  or  lockout,  was  employing, 
not  less  than  twenty-five  persons  in  the  same  general 
line  of  business  in  any  city  or  town  in  the  Common- 
wealth, the  State  Board  shall,  as  soon  as  may  be,  com- 
municate with  such  employer  and  employees  and  en- 
deavor by  mediation  to  obtain  an  amicable  settlement, 
or  endeavor  to  persuade  them,  if  a  strike  or  lockout 
has  not  actually  occurred,  or  is  not  then  continuing,  to 
submit  the  controversy  to  a  local  board  of  conciliation 
and  arbitration  or  to  the  State  Board. 

*'Said  State  Board  shall  investigate  the  cause  of  said 


I70  BUYING  BRAINS 

controversy  and  ascertain  which  party  thereto  is  mainly 
responsible  or  blameworthy  for  the  existence  or  con- 
tinuance of  the  same,  and  may  make  and  publish  a 
report  finding  such  cause  and  assigning  such  responsi- 
bility or  blame.  Said  Board  shall,  upon  the  request 
of  the  Governor,  investigate  and  report  upon  a  con- 
trovers3%  and,  if  in  his  opinion,  it  seriously  affects  or 
threatens  seriously  to  affect  the  public  welfare,  the 
Board  shall  have  the  same  powers  for  the  foregoing 
purposes,  as  are  given  to  it  by  the  provisions  of  the 
following  sections." 

An  Action  at  Law. — "Section  12  :  If  a  controversy, 
which  does  not  involve  questions  which  may  be  the 
subject  of  an  action  at  law  or  suit  in  equity  exists  be- 
tween an  employer,  whether  an  individual,  a  partner- 
ship or  corporation  employing  not  less  than  twenty-five 
persons  in  the  same  general  line  of  business,  and  his 
employees,  the  Board  shall,  upon  application  as  here- 
inafter provided,  and  as  soon  as  practicable,  visit  the 
place  where  the  controversy  exists  and  make  careful 
inquiry  into  its  cause  and  may,  with  the  consent  of  the 
Governor,  conduct  such  inquiry  beyond  the  limits  of 
the  Commonwealth. 

"The  Board  shall  hear  all  persons  interested  who 
come  before  it,  advise  the  respective  parties  what  ought 
to  be  done  or  submitted  to  by  either  or  both,  to  adjust 
said  controversy,  and  make  a  written  decision  thereof, 
which  shall  at  once  be  made  public,  shall  be  open  to 
public  inspection,  and  shall  be  recorded  by  the  secre- 
tary of  said  Board. 

"A  short  statement  thereof  may  in  the  discretion  of 
the  Board,  be  published  in  the  annual  report,  and  the 
Board  shall  cause  a  copy  thereof  to  be  filed  with  the 


UNIONS  171 

clerk  of  the  city  or  town,  in  which  said  business  is 
carried  on.  Said  decision  shall,  for  six  months,  be 
binding  upon  the  parties  who  join  in  said  application, 
or  until  the  expiration  of  sixty  days  after  either  party 
has  given  notice  in  writing  to  the  other  party  and  to 
the  Board  of  his  intention  not  to  be  bound  thereby. 
Such  notice  may  be  given  to  said  employees  by  posting 
it  in  three  conspicuous  places  in  the  shop  or  factory 
where  they  work." 

Signing  the  Application. — ''Section  13 :  Said  ap- 
plication shall  be  signed  by  the  employer  or  by  a  ma- 
jority of  his  employees  in  the  department  of  the  busi- 
ness in  which  the  controversy  exists,  or  by  the  duly 
authorized  agent  or  by  both  parties,  and,  if  signed  by 
an  agent,  claiming  to  represent  a  majority  of  the  em- 
ployees, the  Board  shall  satisfy  himself  that  he  is  duly 
authorized  so  to  do,  but  the  names  of  the  employees 
giving  the  authority  shall  be  kept  secret. 

"The  application  shall  contain  a  concise  statement 
of  the  existing  controversy,  and  a  promise  to  continue 
in  business  or  at  work  without  any  lockout  or  strike 
until  the  decision  of  the  Board,  if  made  within  three 
weeks  after  the  date  of  filing  the  application. 

"The  secretary  of  the  Board  shall  forthwith  after 
such  filing  cause  public  notice  to  be  given  of  the  time 
and  place  for  a  hearing  on  the  application,  unless  both 
parties  join  in  the  application  and  present  therewith 
a  written  request  that  no  public  notice  be  given.  If 
such  request  is  made,  notice  of  the  hearing  shall  be 
given  to  the  parties  in  such  manner  as  the  Board  may 
order,  and  the  Board  may  give  public  notice  thereof, 
notwithstanding  such  request.  If  the  petition  or  pe- 
tioners  fail  to  perform  the  promise  made  in  the  appli- 


172  BUYING  BRAINS 

cation,  the  Board  shall  proceed  no  further  thereon 
without  the  written  consent  of  the  adverse  party." 

Expert  Assistants. — There  is  a  provision  made  in 
"Section  14"  for  the  employment  of  expert  assistants 
to  furnish  information  to  the  members  of  the  Board. 
Local  boards  are  authorized  in  accordance  with  "Sec- 
tion 16''  to  arbitrate  local  disputes;  such  boards  when 
duly  appointed  by  the  parties  desiring  arbitration  and 
conciliation  have  similar  powers  to  those  given  to  the 
State  Board. 

The  National  Arbitration  Board. — In  April,  191 5, 
the  National  Arbitration  Board  made  awards  affecting 
64,000  locomotive  engineers ;  the  railroads  made  four- 
teen concessions  to  the  men,  while  a  number  of  the 
demands  of  the  engineers  were  rejected.  It  was  per- 
fectly natural  that  both  of  the  parties  were  disappointed 
with  certain  decisions  of  the  Board,  yet  it  was  far 
wiser  and  better  for  all  concerned  than  to  tie  up  the 
railroads,  affecting  the  stockholders  and  shippers,  as 
well  as  throwing  out  of  employment  64,000  engineers, 
and  probably  as  many  more  workmen  who  may  have 
been  similarly  affected  through  sympathetic  strikes. 

Control  of  the  Situation. — Frequently  the  de- 
mands of  labor  are  unreasonable  and  it  is  impossible 
to  grant  them,  but  there  are  a  number  of  instances 
where  the  requests  are  just  and  proper  and  the  em- 
ployers refuse  to  arbitrate,  claiming  that  they  should 
be  the  sole  judge  of  the  working  conditions  in  their 
own  establishments,  and  they  absolutely  refuse  to  meet 
or  discuss  the  situation  with  a  representative  of  the 
employees. 

If  they  desire  to  treat  their  employees  fairly,  it  is  a 
poor  excuse  not  to  allow  them  a  spokesman,  or  one 


UNIONS 


173 


who  is  capable  of  acting  for  a  group  of  individuals 
who  are  not  mentally  or  financially  able  to  make  the 
demand  for  their  individual  rights. 

Acts  of  Violence. — When  a  strike  is  called  it  ap- 
pears that  both  the  employers  and  the  unions  often 
employ  the  worst  type  of  men  as  strike  breakers,  who 
delight  in  conducting  criminal  campaigns.  Property 
is  destroyed,  workmen  are  injured,  and  in  some  in- 
stances killed.  This  procedure,  instead  of  opening  the 
pathway  for  a  speedy  settlement,  has  a  tendency  to 
influence  both  parties  to  disregard  their  losses  and 
fight  each  other  to  a  bitter  end. 

A  Noteworthy  Case. — The  courts  have  in  recent 
years  been  called  upon  to  settle  a  number  of  questions 
affecting  the  unions.  The  one  that  attracted  the  most 
attention  was  the  decision  in  regard  to  boycotting, 
which  was  averse  to  the  union,  and  it  greatly  pleased 
the  public  generally,  who  have  never  approved  of  the 
method  of  boycott  utilized  by  the  unions.  The  fight 
lasting  for  years  was  carried  on  by  D.  E.  Loewe  & 
Company,  hat  manufacturers,  and  in  later  years  sup- 
ported by  the  Anti-Boycott  Association  and  they  were 
finally  rewarded  by  a  decision  in  their  favor.  It  was 
unfortunate  that  the  verdict  affected  the  186  men  in- 
dividually, who  were  compelled  to  suffer  a  great  per- 
sonal loss,  instead  of  it  being  a  financial  loss  to  the 
organization,  which  they  represented. 

It  is  an  excellent  argument  in  holding  the  various 
unions  responsible  for  the  acts  they  recommend.  The 
lack  of  responsibility  by  the  unions  and  their  officials 
makes  them  careless  in  their  actions,  and  they  permit 
the  members  to  disregard  their  agreements,  and  con- 
duct the  strikes  without  thought  of  honor,  and  without 


174  BUYING  BRAINS 

right  and  proper  respect  for  the  laws  of  the  nation. 

A  Weakened  Attitude. — The  cause  of  the  unions 
is  thereby  considerably  weakened  as  they  do  not  in- 
spire the  confidence  of  the  employers  or  the  public. 
The  latter  usually  sympathizes  with  the  less  fortunate 
workmen  unless  they  commit  brutal  or  illegal  acts. 

In  our  larger  industries  the  conflict  between  capital 
and  labor  is  frequently  the  result  of  absentee  owner- 
ship. The  actual  owners  are  interested  financially  and 
the  management  is  entrusted  to  others  whose  only  de- 
sire is  to  make  a  satisfactory  financial  report  to  the 
directors. 

A  number  of  the  leading  capitalists  do  not  give  any 
thought  to  the  human  element  in  the  undertakings  in 
which  they  are  financially  interested  as  they  control  a 
varied  list  of  industries  besides  spending  a  large  portion 
of  their  time  in  philanthropic  work. 

Philanthropy. — Without  belittling  the  noble  work 
of  the  philanthropists,  and  fully  appreciating  their 
kindly  efforts,  it  would  be  more  economical  and  just 
if  the  leaders  of  commerce  would  adjust  the  working 
conditions  in  the  concerns  from  which  they  receive 
financial  returns  so  that  the  demands  upon  charitable 
organizations  would  be  minimized.  Nothing  crushes 
the  spirit  of  a  person  so  completely  as  when  forced 
into  a  position  where  charity  must  be  accepted;  noth- 
ing makes  an  individual  so  happy  and  contented  as 
when  he  has  been  treated  justly. 

During  a  recent  industrial  investigation,  some  of 
those  who  were  questioned  in  regard  to  the  industries 
they  dominated,  disclaimed  any  knowledge  of  the 
actual  conditions  existing.  If  men  finance  an  enter- 
prise, or  allow  their  names  to  be  used  in  a  directorate. 


UNIONS  175 

there  should  be  no  excuse  for  accepting  profits  without 
knowing  they  have  been  fairly  earned. 

Getting   in    Close    Touch   With   Employees. — 

While  it  must  be  admitted  that  the  leaders  of  the 
unions  have  become  more  powerful  and  their  arbitrary 
attitude  in  many  instances  has  been  detrimental  to  the 
welfare  of  industry,  their  power  has  been  increased  .on 
account  of  many  of  the  commercial  leaders  refusing 
to  grant  reasonable  demands.  The  nearer  the  em- 
ployers come  to  the  employees,  the  weaker  the  union 
officials  become  and  the  less  power  they  possess.  The 
workmen  desire  justice;  the  unions  assist  them  to  se- 
cure it.  When  the  cause  is  removed  the  power  is  di- 
minished. 

Neither  the  employer  nor  the  union  officials  must 
attempt  to  be  arbitrary ;  they  must  recognize  the  rights 
of  each  other. 

For  a  short  period,  either  may  secure  an  unjust  ad- 
vantage, but  this  will  later  result  in  a  conflict  with 
a  disastrous  termination  for  all  concerned.  While  some 
of  the  labor  leaders  have  abused  their  power  and  in- 
fluence, it  is  an  insufficient  reason  for  denying  all  work- 
men the  privilege  to  organize. 

Some  of  the  employers  have  also  abused  the  power 
of  wealth,  but  this  is  no  cause  for  condemning  all  of 
the  leaders  in  commerce. 

Working  Hand  in  Hand. — Fair-minded  employers 
and  properly  conducted  unions  should  be  able  to  co- 
operate for  mutual  welfare,  and  unless  the  right  spirit 
prevails  it  is  utterly  impossible  to  administer  justice. 
Employers  engaged  in  their  various  industrial  prob- 
lems have  centered  their  attention  on  achieving  success, 
and  many  of  them  in  their  concentrated  thoughts  have 


176  BUYING  BRAINS 

innocently  neglected  to  consider  the  welfare  or  rights 
of  those  who  have  been  instrumental  in  helping  them 
to  climb  the  ladder  of  success. 

The  unions  have  awakened  them  by  voicing  the 
needs  of  the  workmen,  who,  individually,  would  not 
have  had  the  opportunity  or  strength  to  arouse  the 
employers  to  the  realization  of  their  moral  obliga- 
tions to  their  employees. 

The  unions  having  shortened  the  hours  of  labor,  the 
workmen  are  able  to  work  more  strenuously  and  in 
some  instances  perform  as  much  work  in  a  shorter 
working  period.  They  have  raised  the  wage  scale, 
which  was  necessary  to  keep  pace  with  the  steady  in- 
crease in  the  cost  of  living.  They  have  also  added  to 
the  comforts  of  the  employees  who  under  such  cir- 
cumstances can  do  more  efficient  work.  They  have 
prevented  women  and  children  from  performing  work 
for  which  they  were  not  physically  able. 

Improving  the  Standards. — The  unions  have  had 
laws  passed  to  make  the  working  conditions  more  sani- 
tary, not  only  making  the  employees  more  healthy, 
but  also  improving  the  standards  of  output  both  in 
quantity  and  quality.  It  is  true  they  have  also  de- 
manded unreasonable  conditions,  but  unions,  like  em- 
ployers, are  often  mistaken  in  their  opinions,  and  the 
two  parties,  meeting  each  other  with  a  spirit  of  fair- 
ness, should  adjust  their  differences,  accepting  that 
which  is  good  and  rejecting  that  which  is  otherwise. 

Some  Objections. — Employees  and  employers 
thinking  alone  of  their  own  interest  fail  to  consider 
the  effect  of  their  demands  upon  the  other  party.  The 
unions  have  been  rightly  criticised  for  limiting  a  work- 
man's output  and  objecting  to  the  introduction  of  cer- 


UNIONS  177 

tain  types  of  improved  machinery.  The  union  officials 
imagined  they  were  protecting  the  interests  of  the 
workmen  but  they  antagonized  the  employers  and  such 
a  poHcy  would,  in  fact,  make  it  impossible  in  many 
trades  for  American  industries  to  successfully  compete 
with  foreign  concerns  paying  a  lower  wage  rate. 

Mr.  Frederick  W.  Taylor  was  opposed  to  unions  on 
account  of  their  limiting  the  efforts  of  the  workmen. 
He  did  not  consider  all  men  doing  similar  work  as 
being  born  equal  and  was  opposed  to  reducing  the 
output  of  the  efficient  workmen  to  the  level  of  the 
inefficient. 

He  gave  the  unions  credit  for  what  they  had  accom- 
plished in  other  directions  and  believed  they  had  a 
splendid  opportunity  to  assist  the  workmen,  if  they 
would  assume  a  different  attitude. 

With  the  introduction  of  scientific  management  in 
so  many  of  the  important  industries  and  with  the  in- 
creasing demand  for  efficiency  engineers  the  question 
has  arisen  as  to  the  attitude  that  the  scientific  managers 
will  assume  toward  the  unions,  and  how  it  will  be  re- 
ceived by  the  unions. 

Opinions  of  Efficiency  Engineers. — Some  of  the 
efficiency  engineers  believe  that  by  introducing  scien- 
tific management  a  workman  will  increase  his  earn- 
ings, decrease  his  wasteful  efforts  and  have  more  agree- 
able surroundings  than  the  unions  could  have  otherwise 
secured  for  him;  therefore  a  workman  should  desert 
his  union,  which  has  lost  its  usefulness. 

This  theory  may  be  true  in  instances  where  the  man- 
agement is  willing  to  give  to  labor  its  fair  share  of  the 
advantage  gained  by  scientific  management.  Unscru- 
pulous employers,  learning  of  the  increased  output  and 


178  BUYING  BRAINS 

decreased  cost  of  production,  will  attempt  to  fix  a  wage 
scale  and  even  a  bonus  so  that  the  workman  will  not 
earn  more  than  he  does  under  customary  management. 
He  will  argue  that  better  working  condition  for  the 
employees  is  sufficient  inducement  and  that  the  entire 
saving  belongs  to  him,  as  he  had  furnished  the  capital 
and  had  introduced  scientific  management  on  his  own 
initiative. 

Such  a  practice  would  give  the  unfair  employer  an 
advantage  over  the  fair  employer.  Competition  be- 
tween the  two  would  make  it  necessary  for  many  who 
are  inclined  to  be  just  to  follow  the  example  of  those 
who  might  adopt  a  more  selfish  policy. 

Solution  of  the  Problem. — The  new  questions  that 
arise  through  the  introduction  of  scientific  management 
must  be  solved  equitably.  The  unions  have  an  oppor- 
tunity of  demonstrating  their  usefulness  by  studying 
the  benefits  that  scientific  management  affords  the 
workmen  and  by  co-operating  with  the  employers 
rather  than  opposing  its  introduction. 

Two  objections  have  been  mentioned  in  regard  to 
scientific  management:  one  is  that  it  overworks  the 
employee,  the  other  is  that  by  increasing  the  output  it 
decreases  the  number  of  workmen  required,  thereby 
throwing  out  of  employment  the  inefficient  employees. 

The  principles  of  scientific  management  do  not  in- 
clude the  overworking  of  the  employees  but  on  the 
contrary,  it  simplifies  and  makes  their  work  easier. 

Scientific  management  instructs  the  workman,  plans 
his  work  for  him,  relieves  him  of  duties  he  is  other- 
wise not  capable  of  performing  and  allows  him  to 
concentrate  on  individual  tasks  By  increasing  the  out- 
put and  lowering  the  production  cost  it  creates  new 


UNIONS  179 

outlets  for  articles  which  were  formerly  considered 
prohibitive  by  many.  It  also  increases  the  sale  of  our 
products  in  foreign  markets  and  helps  to  overcome 
the  disadvantages  that  we  have  suffered  during  the 
past. 

Granting  Demands. — Scientific  managerhent  has 
made  it  possible  to  grant  many  of  the  demands  of  the 
unions,  higher  wages,  shorter  hours  and  a  protection 
to  the  less  able  workman,  by  discovering  his  weakness 
and  helping  him  become  more  efficient. 

If  the  unions  oppose  scientific  management,  they 
will  lose  the  confidence  of  the  workmen  (the  majority 
of  whom  desire  its  introduction),  will  be  compelled  to 
fight  the  employers,  who  are  in  a  position  to  grant 
what  the  workmen  have  demanded  for  years,  and  will, 
furthermore,  lose  the  sympathy  of  the  public,  who  are 
beginning  to  realize  what  scientific  management  means 
to  the  employer,  employee  and  consumer. 

The  workmen  should  not  be  condemned  for  having 
joined  the  union  to  which  they  belong.  They  do  not 
believe  their  interests  would  be  protected  otherwise. 
The  unions  should  not  be  criticised  for  attempting  to 
obtain  for  the  workmen  fair  wages  and  proper  work- 
ing conditions  which  would  otherwise  be  unbearable 
in  many  instances. 

Paid  According  to  Time. — It  has  been  the  custom 
for  employers  to  pay  employees  a  fixed  wage  for  a  cer- 
tain class  of  work,  the  wage  scale  being  adjusted  and 
paid  according  to  time  regardless  of  ability.  This 
method  has  reduced  the  natural  ability  of  the  more 
capable  who  knew  that  increased  production  would 
not  mean  a  larger  income.  There  was  no  incentive  for 
the  employees,  no  records  kept  of  their  performances 


i8o  BUYING  BRAINS 

and  the  workmen  were  satisfied  to  do  just  enough  to 
retain  their  positions ;  but  scientific  management  meas- 
ures their  achievements,  assists  them  to  increase  their 
production  and  rewards  them  accordingly. 

Co-operation  of  Unions. — The  unions  instead  of 
attempting  to  Hmit  the  output  should  encourage  greater 
accomplishments  and  co-operate  to  increase  the  earn- 
ings of  the  workmen. 

The  unions  have  done  considerable  good,  but  as  now 
constituted,  many  of  them  are  a  hardship  and  a  handi- 
cap to  both  the  employer  and  the  employees. 

Men  are  not  usually  admitted  to  clubs  and  societies 
until  they  are  passed  upon  as  fit  members.  The  unions 
should  not  accept  members  and  demand  a  stated  wage 
for  them  unless  the  men  are  capable  of  earning  that 
wage. 

Increasing  Recognition. — The  unions  can  gain 
recognition  and  the  respect  of  employers  and  em- 
ployees by  raising  the  standards  of  their  membership 
so  that  the  employers  would  willingly  give  the  pref- 
erence to  union  members,  being  assured  that  member- 
ship implied  capability. 

When  the  unions  demand  excessive  wages  for  in- 
competent service,  they  are  weakening  their  cause  and 
injuring  the  more  capable  workmen  who  are  often 
judged  by  the  company  they  keep. 


CHAPTER  X 
CO-OPERATION 

COMPETITION  develops  by  destructive  methods; 
a  small  percentage  survives  and  the  survivor  is 
often  left  in  a  weakened  condition. 

Co-operation  develops  by  enlightenment ;  it  preserves 
the  better  elements  and  eliminates  what  is  harmful  and 
wasteful ;  it  elevates  all  and  destroys  none. 

This  is  unquestionably  the  age  of  co-operation 
among  individuals,  organizations  and  associations,  and 
institutions  are  co-operating  with  one  another  for  their 
mutual  welfare.  A  good  fighter  may  outwit  many 
competitors  but  eventually  must  travel  alone,  and  he 
finds  it  impossible  to  compete  with  others  who  are  con- 
tent to  travel  together. 

Without  co-operation  nothing  worth  while  has  been, 
or  can  be,  accomplished.  Individuals  may  undertake 
a  task,  but  co-operation  is  essential  to  a  successful 
termination  of  any  magnitude.  The  average  person  is 
efficient  in  one  respect  and  inefficient  in  many  others. 
The  co-operation  of  men  raises  the  efficiency  of  an  or- 
ganization. 

The  President  of  the  United  States  holds  Cabinet 
meetings  and  each  member  is  considered  a  specialist 
in  one  department  of  the  government.  The  expert 
knowledge  of  the  individual  acts  as  a  guide  and  the 
combined  counsel  of  the  other  members  furnishes  the 
President  with  sound  judgment.  The  co-operation  of 
the  members  of  his  Cabinet  makes  it  possible  for  the 
President  to  decide  questions  of  every  conceivable 
character. 

i8i 


i82  BUYING  BRAINS 

Pulling  Together. — Competitors  instead  of  fighting 
each  other  as  formerly,  have  changed  their  tactics  and 
are  working  together  to  secure  mutual  advantages. 
Manufacturers,  jobbers  and  retailers  are  co-operating 
w^ith  one  another  and  realize  that  their  success  is  de- 
pendent upon  the  healthy  growth  of  each  other. 

Employers  and  employees  are  co-operating  to  a 
greater  extent,  employers  being  convinced  that  it  is 
impossible  to  obtain  maximum  results  without  the  sin- 
cere support  and  co-operation  of  employees. 

In  former  years  each  concern  and  every  individual 
had  a  different  method  of  performing  the  work ;  a  good 
idea  was  a  secret  and  unknown  to  the  others  and  the 
consequence  was  that  the  wasteful  practices  over- 
shadowed the  few  worthy  ideas  in  each  establishment. 
If  a  concern  were  unusually  prosperous,  it  was  con- 
sidered good  business  for  others  to  secure  an  employee 
from  it,  who  would  divulge  the  secrets  of  his  former 
employer. 

If  a  man  had  been  engaged  in  business  for  any 
length  of  time  he  ridiculed  and  criticised  a  new  com- 
petitor for  encroaching  on  the  rights  of  an  established 
merchant.  If  a  retailer  required  an  article  that  would 
take  considerable  time  to  obtain  from  a  factory,  he 
would  be  compelled  to  purchase  it  from  a  competitor 
at  retail  price,  and  would  consider  himself  fortunate  if 
the  competitor  did  not  know  to  whom  he  was  selling. 

Modern  Ideas. — To-day  we  are  laboring  under  dif- 
ferent conditions.  While  there  are  still  many  employ- 
ers who  believe  themselves  superior  to  their  younger 
competitors,  or  to  those  who  have  emigrated  to  this 
country  a  few  years  later  than  themselves,  the  ma- 
jority of  merchants  are  becoming  more  broadminded 


CO-OPERATION  183 

and  are  meeting  the  conditions  that  confront  them  in 
a  square  manner. 

In  contrast  with  the  former  secrets  of  the  trade, 
associations  have  been  organized  in  the  various  indus- 
tries, chambers  of  commerce  and  boards  of  trade  have 
been  formed  in  the  different  communities  where  the 
employers  assemble  to  exchange  ideas,  giving  each 
other  the  benefit  of  their  experiences  and  co-operating 
with  all  of  the  members  for  their  general  welfare. 

The  employer  of  yesterday  traveled  in  darkness  and 
considered  his  personal  experience  his  best  and  only 
teacher ;  to-day  the  experience  of  one  is  the  knowledge 
of  all. 

Combined  Efforts. — The  accomplishments  of  a  few 
of  the  associations  would  profitably  fill  a  volume  for 
the  guidance  of  organizations  to  be  launched  as  well 
as  those  that  are  now  existing.  In  almost  every  im- 
portant industry  there  is  at  least  one  national  associa- 
tion that  includes  the  membership  of  local  associations 
and  holds  annual  conventions  where  they  distribute 
literature  and  divulge  information  for  the  benefit  of 
the  entire  trade. 

In  every  field  of  commerce  there  are  handicaps,  also 
conditions  that  should  not  exist  and  various  issues  that 
cannot  be  satisfactorily  adjusted  by  the  individual, 
but  right  here  the  moral  and  financial  support  of  a 
large  group  is  required  to  settle  them. 

When  an  individual  concern  complains  about  these 
or  other  harmful  conditions  very  little  attention  is 
given  to  its  complaint,  but  when  an  association  repre- 
senting the  entire  trade  voices  the  sentiments  of  its 
members,  the  claims,  if  justified,  are  quickly  adjusted. 

Unfortunately,  there  are  too  many  employers  who 


i84  BUYING  BRAINS 

do  not  take  active  interest  in  their  associations.  They 
selfishly  allow  a  few  members  to  transact  the  business 
of  the  organization  and  are  only  too  willing  to  accept 
the  benefits  accruing  from  the  efforts  of  those  who  are 
active. 

Accomplishing  Results. — Many  employers  often 
imagine  that  they  are  too  large  or  too  small  to  become 
actively  interested  in  the  formation  of  an  association, 
or  to  the  completion  of  its  plans,  but  this  has  a  detri- 
mental effect  and  the  responsibility  is  usually  shoul- 
dered by  a  minority. 

The  more  prosperous  an  employer  is  the  more  he 
should  feel  obligated  to  an  association  that  has  bet- 
tered trade  conditions  and  his  co-operation  is  both 
needed  and  rightfully  expected. 

The  smaller  employer  can  frequently  absorb  much 
knowledge  by  associating  with  other  members  of  his 
association  but  if  he  neglects  the  opportunity  he  does 
himself  an  injustice.  At  the  meeting,  ideas  are  ex- 
changed, styles  and  customs  suggested  and  accepted, 
complaints  adjusted  and  the  members  return  to  their 
industries  materially  benefited.  Conclusions  are  no 
longer  formed  from  actual  experiences  in  their  own 
industry  but  are  arrived  at  by  those  of  others ;  instead 
of  being  antagonistic  to  their  competitors,  they  are  con- 
vinced that  business  is  made  more  pleasant  and  profit- 
able by  being  helpful  to  each  other. 

Profitable  Mutual  Advantage. — Probably  one  of 
the  greatest  benefits  derived  is  in  the  exchange  of  credit 
information  in  regard  to  customers,  whether  they  are 
consumers,  retailers  or  jobbers. 

While  such  large  mercantile  agencies  as  Dun  and 
Bradstreet  are  wonderful  organizations  and  publish 


GO-OPERATION  185 

books  of  extreme  value,  the  credit  information  fur- 
nished by  the  various  associations  concentrates  in  a 
particular  field  and  is  a  helpful  adjunct. 

In  many  trades  it  is  possible  to  estimate  if  a  mer- 
chant is  "overbuying,"  and  learn  how  he  pays  his  bills; 
in  fact  it  has  been  helpful  to  prevent  reckless  purchas- 
ing in  addition  to  considerably  reducing  the  number  of 
fraudulent  transactions.  The  associations  have  greatly 
assisted  the  members  to  prevent  fraud  and  have  done 
a  great  deal  to  punish  the  perpetrators  of  such  acts. 
And  have  thus  contributed  to  improve  conditions. 

In  many  instances  investigations  are  made  and  a 
number  of  such  transactions  traced  to  bankruptcy  law- 
yers in  the  larger  communities  who  instruct  their  clients 
how  to  conduct  profitable  failures  which  are  staged  so 
perfectly  that  they  would  be  a  credit  to  Mr.  David 
Belasco.  Co-operation  has  eliminated  this  practice  to 
some  extent. 

The  National  Furniture  Manufacturers'  Protective 
Association  was  formed  in  191 5  in  order  to  save  the 
wholesalers  from  losses  such  as  they  sustained  through 
the  failures  of  small  dealers. 

In  describing  the  conditions  that  led  to  the  forma- 
tion of  the  organization,  it  was  stated : — "It  was  found 
that  the  settlements  made  by  the  bankrupt  dealers 
were,  on  the  average,  very  much  smaller  during  the 
recent  year  than  formerly  and  in  some  cases  fraud 
was  discovered. 

"The  association  will  first  of  all  try  to  aid  the  dealer 
who  is  temporarily  embarrassed  through  lack  of  ready 
cash  by  supplying  him  money  enough  to  pay  off  his 
most  pressing  creditors.  For  this  purpose  a  sinking 
fund  will  be  arranged.     In  cases  where  the  manufac- 


i86  BUYING  BRAINS 

turers  have  reason  to  believe  that  a  debtor  has  con- 
cealed assets,  or  is  attempting  to  deceive  his  creditors 
in  any  other  way,  the  association  will  investigate  and 
prosecute  the  offender." 

The  associations  have  been  helpful  to  the  retailers 
in  determining  credits.  In  a  number  of  communities 
there  has  been  an  exchange  conducted  by  the  organ- 
ization furnishing  the  names  and  addresses  of  resi- 
dents who  do  not  pay  their  obligations  promptly. 

Special  Advantages. — Many  of  the  associations 
have  been  instrumental  in  preventing  the  merchants 
from  being  subjected  to  impositions.  The  members 
have  been  prohibited  from  advertising  in  special  edi- 
tions published  for  the  profit  of  the  promoter  and  not 
the  advertiser,  from  advertising  in  programmes  of 
fairs,  entertainments  and  similar  functions  which  are 
usually  regarded  as  donations. 

The  associations  in  a  number  of  cities  have  ap- 
pointed committees  on  charities  to  investigate  chari- 
table societies  and  have  arranged  to  have  the  contribu- 
tions made  through  the  association,  thereby  saving 
the  members  a  continual  annoyance  and  embarrassment 
as  well  as  eliminating  such  philanthropic  undertakings 
as  are  poorly  managed,  or  conducted  mainly  for  the 
benefit  of  the  collectors  of  the  funds. 

Some  of  the  associations  have  been  extremely  suc- 
cessful in  influencing  important  industries  to  locate  in 
their  cities,  thus  creating  a  greater  prosperity  for  their 
merchants. 

Excursions  from  nearby  localities  have  been  helpful 
in  securing  considerable  new  patronage  for  the  mem- 
bers of  various  associations.  Better  roads  arid  im- 
proved transportation  have  frequently  been  advocated 


CO-OPERATION        '  187 

and  they  have  added  to  the  profits  of  the  merchants 
in  many  cities. 

It  is  frequently  remarked  that  our  legislatures  are 
controlled  by  the  representatives  of  large  interests.  It 
is  equally  true  that  the  many  smaller  concerns  have 
practically  no  voice  in  the  legislative  programmes. 
Every  local  association  should  have  a  committee  on 
legislation  to  enlighten  its  representative  on  the  com- 
mercial needs  of  its  community,  and  to  attempt  to  se- 
cure the  enactment  of  laws  that  are  just  and  not  detri- 
mental to  the  interests  of  the  employers  to  conduct 
their  enterprises  on  an  honorable  basis. 

The  Associated  Advertising  Clubs  of  the  World. 
— Probably  no  association,  in  such  a  short  period,  has 
attracted  so  much  favorable  attention  as  the  Asso- 
ciated Advertising  Clubs  of  the  World.  Their  efforts 
have  not  only  rewarded  their  members  but  have  been 
a  distinct  benefit  to  the  consumer,  merchant  and  worthy 
publisher. 

The  True  Value  of  Co-operation. — If  the  retailers 
in  an  industry  form  an  association  and  the  manufac- 
turers in  the  same  field  should  organize,  there  should 
be  co-operation  between  the  two  associations,  as  the 
success  of  the  retailers  largely  influences  that  of  the 
manufacturers.  The  retailer,  jobber  and  manufacturer 
should  co-operate  with  each  other  for  their  mutual 
benefit.  The  question  of  credits  previously  discussed 
opens  an  avenue  for  co-operation  that  has  been  tested 
with  satisfactory  results. 

While  credit  information  and  sound  judgment  will 
prevent  many  failures,  there  will  be  instances  where 
changed  conditions  or  circumstances  make  it  impos- 


i88  BUYING  BRAINS 

sible  for  many  merchants  to  meet  their  obligations  in 
accordance  with  the  terms  of  sale. 

Credit  is  an  important  asset.  It  is  more  valuable 
than  a  limited  amount  of  cash;  it  is  a  privilege  that 
is  granted — do  not  abuse  it.  If  you  are  temporarily 
embarrassed,  go  to  your  largest  creditors  and  explain 
to  them  the  true  conditions  that  exist — it  is  to  their 
interest  to  see  that  the  proper  assistance  is  extended. 
If  there  is  a  co-operative  spirit  between  the  debtor  and 
his  creditors,  a  trustee  may  be  appointed  at  a  creditors' 
meeting,  who  safeguards  the  assets  and  guides  the 
debtor  in  his  daily  acts,  converts  the  assets  gradually 
into  cash,  paying  the  creditors  in  installments,  and  quite 
frequently  not  only  pays  all  his  creditors  in  full,  but 
leaves  the  business  in  such  a  healthful  condition  that 
the  debtor  is  able  to  continue  his  business  with  confi- 
dence re-established  and  in  better  circumstances  than 
he  had  enjoyed  for  many  years.  This  is  but  one  of 
many  ways  in  which  the  wholesale  and  the  retail  mer- 
chants should  co-operate  with  each  other. 

Of  Value  to  All  Concerns. — Many  merchants  who 
conduct  small  establishments  are  closely  confined  to 
their  business ;  their  knowledge  is  limited  in  many  di- 
rections and  to  be  successful  they  require  the  co-opera- 
tion and  assistance  of  others. 

The  manufacturers  and  larger  employers  usually 
possess  superior  knowledge  and  generally  employ  a 
few  men  of  greater  ability  than  the  customers;  such 
men  are  able  to  furnish  advice  and  suggestions  to  the 
patrons  that  will  be  helpful  to  them  and  through  in- 
creased patronage  and  loyalty  the  concern  receives  an 
indirect  Ijnefit.  Just  as  the  merchandise  is  sold  at 
wholesale,  knowledge  and  assistance  can  be  extended 


CO-OPERATION  189 

wholesale,  which  can  thus  prove  mutually  beneficial. 

It  is  surprising  that  more  of  our  mammoth  concerns 
have  not  inaugurated  co-operative  programmes;  it  is, 
figuratively  speaking,  not  an  expensive  plan  when  prop- 
erly executed  and  its  advantages  are  far  greater  than 
imagined  by  many  persons.  The  writer  has  personally 
tested  this  suggestion  by  having  published  a  book  of 
"Selling  Plans"  for  the  retailers  in  the  trade  in  which 
he  was  interested.  The  book  was  not  only  well  re- 
ceived but  proved  extremely  helpful  to  the  members 
of  the  trade  who  were  ambitious  and  desired  to  conduct 
campaigns  that  would  have  been  almost  impossible 
without  such  assistance. 

Service  Departments. — Every  large  concern  should 
have  a  service  department  where  information  and  co- 
operation will  be  cheerfully  extended  to  the  patrons. 
It  is  surprising  how  easy  it  becomes  to  detect  the 
weakness  of  an  individual  and  in  a  few  moments  his 
commercial  life  may  be  changed,  making  his  business 
more  pleasant  and  profitable.  Co-operative  plans  of 
scientific  management,  advertising,  window  and  store 
display,  methods  of  bookkeeping  and  collection  can 
be  conducted  profitably  for  all  concerned.  The  retailer 
who  increases  his  business  will  create  a  larger  market 
for  the  product  of  the  wholesaler. 

If  a  business  is  managed  scientifically,  the  wastes  are 
naturally  eliminated;  if  the  retailer  collects  his  money 
more  promptly,  he  is  in  a  better  position  to  meet  his 
obligations  in  accordance  with  his  promises. 

The  proprietor  of  a  chain  of  grocery  stores  in  a  recent 
speech  stated  that  if  he  were  marketing  a  new  article 
he  would  include  in  his  advertising  campaign  a  sample 
package  to  be  distributed  to  each  clerk  in  the  stores 


I90  BUYING  BRAINS 

where  the  article  was  handled.  Clerks  usually  do  not 
purchase  new  articles  in  stock  and  when  customers 
inquire  regarding  an  advertised  article  they  cannot  con- 
scientiously recommend  what  is  contained  in  a  sealed 
package  the  contents  of  which  they  have  neither  ex- 
amined nor  tasted. 

Frequently  questions  are  asked  salesmen,  both  whole- 
sale and  retail,  regarding  various  products,  which  they 
cannot  intelligently  answer. 

The  retailer  handling  many  articles  sells  some  of 
which  he  knows  absolutely  nothing;  he  will  ignorantly 
recommend  and  sometimes  reject  articles  through  a 
lack  of  knowledge.  The  salesman  and  the  consumer 
should  receive  detailed  information  regarding  what 
they  sell  or  purchase ;  furthermore,  you  cannot  ensure 
complete  satisfaction  nor  justice  for  your  product  un- 
less literature  is  included  which  enlightens  each  person 
purchasing  or  selling  it. 

Manufacturers  and  distributors  imagine  when  buy- 
ers are  informed  as  to  the  manufacture  of  an  article 
and  a  sale  is  consummated  that  they  have  completed 
their  portion  of  the  distribution.  The  manufacturer 
should  explain  to  the  wholesaler  how  the  product  is 
made  and  what  it  contains ;  the  distributor  should  not 
only  educate  the  retailer,  but  should  assist  him  in  the 
sale  of  the  products. 

A  few  years  ago  an  article  was  extensively  adver- 
tised which  was  superior  to  many  similar  brands  and 
a  higher  price  asked  for  it.  The  salesmen  in  several 
prominent  stores  were  asked  by  a  prospective  purchaser 
whether  the  article  was  really  better  and  worth  the 
difference  in  price.  He  was  told  in  each  instance  that 
they  could  not  explain  why  the  higher  price  was  de- 


CO-OPERATION 


191 


manded.  This  information  should  all  go  with  service 
that  is  to  give  satisfaction  to  the  end. 

Retailers'  Co-operation. — Probably  the  greatest 
opportunity  for  the  retailers  to  co-operate  is  to  extend 
more  courtesy  and  give  a  proper  hearing  to  the  repre- 
sentatives who  call  upon  them.  One  of  the  largest 
items  of  expense  to  the  distributor  is  the  salary  and 
incidental  charges  of  the  traveling  salesman.  This 
can  be  materially  reduced  if  the  retailers  would  co- 
operate. In  many  lines  salesmen  travel  a  small  fraction 
of  the  year  and  waste  a  large  portion  of  their  time. 

Salesmen  require  annual  incomes  for  the  compara- 
tively short  time  they  travel,  in  addition  to  other  ex- 
penses, such  as  hotel,  transportation  and  many  smaller 
items.  A  salesmen  earning  $3,000  annually,  who  ac- 
tually travels  150  days,  receives  a  salary  of  $20  daily 
for  services  exclusive  of  other  items,  which  may 
amount  to  $10,  making  a  total  of  $30  daily.  It  is  not 
unusual  to  meet  a  dozen  salesmen  in  the  lobby  of  a 
commercial  hotel,  who  are  waiting  for  customers  who 
do  not  keep  their  appointments  or  who  are  not  courte- 
ous enough  to  telephone  and  inform  the  salesmen  when 
they  will  arrive,  or  if  they  have  any  intention  of  keep- 
ing their  engagements.  Salesmen  are  often  treated  dis- 
courteously after  having  been  kept  waiting  an  hour  or 
more  for  an  interview. 

A  buyer  cannot  purchase  from  all  salesmen  who  call, 
but  their  time  should  not  be  wasted,  and  being  away 
from  home  for  a  long  period  is  distasteful  enough 
without  receiving  sarcasm  from  those  whom  they  may 
meet. 

Successful  merchants  and  buyers  receive  valuable 
suggestions  and  information  from  traveling  salesmen 


192  BUYING  BRAINS 

who  accumulate  considerable  knowledge  of  the  exist- 
ing conditions  in  the  various  communities  and  are  the 
first  to  learn  of  the  innovations  in  their  industry. 

Merchants  should  wisely  cater  to  them  and  assist  in 
making  their  work  more  pleasant  and  less  expensive. 
The  expense  of  selling  is  added  to  the  cost  of  the  mer- 
chandise and  when  the  waste  of  time  is  eliminated  and 
the  cost  of  selling  is  reduced  to  a  minimum,  the  selling 
price  can  also  be  lowered. 

Several  of  the  large  department  stores  make  it  com- 
pulsory for  the  buyers  to  give  the  salesmen  an  audience 
and  examine  each  line  that  is  offered  for  sale. 

Merchants'  Co-operation. — The  merchant  may 
also  co-operate  when  he  begins  to  realize  that  the  credit 
extended  to  him  should  not  be  abused  and  that  the 
money  he  receives  for  his  stock  does  not  belong  to 
him  unless  his  debts  have  been  fully  paid.  It  is  not 
unusual  to  see  a  merchant  purchase  property,  stock,  or 
invest  in  other  enterprises  with  the  money  that  does 
not  rightfully  belong  to  him. 

Nothing  is  so  distasteful  to  a  creditor  than  to  dis- 
cover that  the  inability  of  a  customer  to  meet  his 
obligations  is  because  of  an  investment  in  real  estate 
or  securities  which  cannot  be  converted  into  cash  when 
the  bill  has  matured. 

Co-operative  Societies. — Co-operative  societies 
(  formed  for  the  purpose  of  sharing  profits  or  reducing 
prices  among  the  dealers  in  the  various  industries) 
have  not  met  with  as  much  success  in  this  country  as  in 
Europe.  Probably  the  reason  lor  this  is,  that  the  aver- 
age American  prefers  the  independence  of  trading  with 
such  concerns  as  he  may  select,  independent  of  their 
financial  atfiiiations. 


CO-OPERATION  193 

However,  the  possibilities  oi  such  societies  have  been 
demonstrated  by  the  success  of  a  concern  like  the 
American  Druggists  Syndicate,  which  has  in  a  few 
years  grown  from  a  small  beginning  to  a  factory  and 
output  of  mammoth  proportions. 

Such  societies  may  in  the  future  become  compulsory 
in  several  trades  so  that  the  individual  may  compete 
with  the  chain  stores  which  are  able  to  obtain  price 
concessions  by  purchasing  in  very  large  quantities  or 
by  manufacturing  their  own  products.  In  industries 
where  the  retailer  purchases  a  large  number  of  articles 
in  small  quantities  from  many  concerns,  it  would  be 
better  and  more  economical  if  he  would  purchase  his 
supplies  from  a  co-operative  society  at  lower,  or  even 
the  same  prices. 

Co-operation  With  Employees. — While  the  dif- 
ferent methods  of  co-operation  referred  to  are  impor- 
tant, many  concerns  have  neglected  to  co-operate  along 
the  lines  suggested  and  have  been  fairly  successful  but 
one  form  of  co-operation  that  is  essential  to  permanent 
success  is  the  co-operative  spirit  between  employer  and 
employees. 

In  recent  years  the  growth  of  so  many  concerns  and 
the  consolidation  of  others  has  destroyed  the  personal 
relationship  that  existed  when  employers  and  em- 
ployees came  into  daily  contact  with  each  other.  While 
the  number  of  factories  in  many  industries  is  decreas- 
ing, the  number  of  employees  and  amount  of  produc- 
tion are  steadily  increasing.  The  men  controlling  the 
industries  are  fewer  in  numbers  and  the  actual  man- 
agement is  frequently  in  the  hands  of  high  salaried 
employees. 

The  officers  of  large  concerns  not  meeting  employees 


194  BUYING  BRAINS 

personally,  deal  with  them  through  a  representative. 
The  employer's  treatment  of  the  employees  is  sometimes 
influenced  by  the  advice  of  the  representative  and  it 
frequently  lacks  the  human  element  that  existed  and 
still  exists  in  the  smaller  establishments. 

Many  firms  fail,  others  find  their  competitors  grow- 
ing more  rapidly  than  themselves  and  search  for  rea- 
sons and  invent  excuses,  while  the  real  cause  is  lack 
of  co-operation.  When  employers  and  employees  do 
not  co-operate  in  such  instances,  it  is  perfectly  natural 
that  the  employees  do  not  co-operate  with  each  other. 
Each  individual  is  considering  personal  gain  and  no 
one  has  any  regard  for  the  interests  of  the  concern. 
If  the  proper  co-operation  exists,  each  employee  is 
thinking  and  working  for  the  advantage  of  the  em- 
ployer, feeling  confident  that  his  personal  interests 
will  be  safeguarded  by  him.  If  perfect  co-operation 
is  desired  in  an  industry  it  must  begin  at  the  head. 

Officers. — The  directors  of  a  corporation  or  the 
members  of  a  firm  must  be  honorable  and  fair  to  each 
other.  They  should  have  an  equitable  agreement  and 
understanding;  they  should  work  together  harmoni- 
ously for  the  welfare  of  the  concern  and  if  disputes 
arise  or  a  question  of  policy  is  considered,  there  should 
be  an  earnest  discussion  without  unnecessary  excite- 
ment and  each  individual  should  subscribe  to  a  common 
interest  with  unselfish  motives. 

The  duties  of  the  various  officers  should  be  outlined 
so  there  will  not  be  a  conflict  of  authority.  The  offi- 
cers should,  directly  or  indirectly,  consult  with  the 
heads  of  departments,  not  only  to  give  instructions  but 
to  learn  the  effect  of  such  instructions. 

There  should  be  a  spirit  of  co-operation  among  the 


CO-OPERATION  195 

employees  holding  the  higher  positions.  Frequently 
there  exist  petty  jealousies  and  bitter  hatred  among 
them,  but  a  keener  spirit  of  co-operation  will  eliminate 
the  feeling. 

In  many  concerns  employees  who  should  be  working 
harmoniously  are  making  the  tasks  of  each  other  un- 
pleasant and  impossible  of  worthy  achievement.  Pe- 
riodical meetings  of  the  important  employees  either 
with  or  without  the  members  of  the  concern,  create  an 
excellent  influence  which  results  in  a  better  under- 
standing and  more  harmonious  relationship. 

An  Individual  Board  of  Trade. — The  executives  of 
the  John  Wanamaker  store  comprise  a  Board  of  Trade 
and  in  addition  to  the  regular  meetings  they  have  an 
annual  dinner  at  one  of  the  leading  hotels. 

The  membership  of  the  organization  is  composed 
of  the  heads  of  the  various  sections,  including  the 
general  manager  and  chief  of  publicity.  One  of  the 
purposes  of  the  organization  is  to  exchange  ideas  for 
the  betterment  of  the  business.  When  such  co-opera- 
tion exists  a  similar  spirit  is  instilled  by  the  heads  of 
departments  into  the  minds  of  the  employees  in  their 
respective  departments. 

In  some  establishments  the  employees  are  conscien- 
tious in  their  endeavors,  willing  to  assist  others  and 
extend  a  hearty  welcome  to  the  patrons,  while  in  other 
concerns  the  employees  merely  do  what  they  are  told, 
and  in  a  sulky  manner,  disregarding  the  wishes  of  other 
workers  and  meeting  the  customers  with  a  very  indif- 
ferent attitude. 

Co-operation  is  largely  the  result  of  loyalty  to  the 
employer. 

Loyalty  and  Fair  Treatment. — Loyalty  to  the  con- 


196  BUYING  BRAINS 

cern  is  usually  the  result  of  fair  treatment  to  the  em- 
ployees. If  co-operation  is  expected  without  deserv- 
ing it,  you  will  be  sadly  disappointed.  Unless  the  em- 
ployees co-operate  and  are  loyal  to  the  concern,  it  is 
impossible  to  present  a  united  front  that  will  satisfy 
the  patrons  and  achieve  maximum  results.  The  at- 
tention that  a  customer  receives  in  trivial  transactions 
is  what  is  mostly  appreciated.  The  work  of  the  em- 
ployees is  more  pleasant  and  the  tasks  are  much  easier 
if  they  are  intensely  interested  in  what  they  are  per- 
forming. Some  employers  assume  the  attitude  that  if 
they  give  fair  remuneration,  the  employees  are  ex- 
pected to  perform  their  duties.  This  presumption  is 
correct,  but  show  them  an  interest  in  their  welfare  and 
they  will  do  more  than  their  prescribed  duties. 

There  are  many  occasions  when  an  employee  can 
render  exceptional  service  if  co-operation  is  inspired, 
and  the  average  employee  under  such  conditions  will 
measure  up  to  the  opportunity. 

Many  executives  and  foremen  in  establishments  have 
the  personality  that  will  influence  the  employees  to 
become  interested  in  their  work  while  the  same  em- 
ployees in  the  same  concern,  under  different  authority, 
will  show  a  lack  of  interest.  Nothing  will  make  an 
employee  more  loyal  than  to  help  him  improve  him- 
self for  his  own  advantage.  The  average  employee  is 
very  grateful  to  those  who  demonstrate  to  him  how  to 
develop  his  ability  and  obtain  promotion. 

Co-operation  can  be  secured  in  large  or  small  estab- 
lishments if  the  executive  desires  it  and  encourages  the 
others  to  think  it,  teach  it  and  act  it.  When  some 
concerns  are  entered  it  may  be  breathed  in  the  atmos- 
phere, and  if  there  are  any  in  your  employ  who  attempt 


CO-OPERATION  197 

to  prevent  it,  they  should  be  either  converted  or  dis- 
missed.     Destroying    factors    should   be    eliminated. 

Negligence. — The  managers  and  clerks  in  some 
stores  do  not  furnish  information  that  will  be  helpful 
to  the  other  departments  and  are  only  interested  in  the 
success  of  their  individual  departments.  Clerks  pur- 
posely neglect  to  deliver  messages  or  complete  orders 
promptly  for  employees  whom  they  dislike.  Buyers 
refuse  to  allow  idle  employees  to  assist  in  other  depart- 
ments that  may  be  exceedingly  busy  and  require  their 
services. 

A  soda  dispenser  in  a  large  New  York  drug  store 
was  asked  if  the  Sunday  laws  prohibited  the  sale  of 
shaving  articles.  He  replied  that  he  did  not  know, 
and  the  customer  left  without  further  inquiry  or  mak- 
ing a  purchase. 

Employees  enlarge  on  the  mistakes  of  those  whom 
they  dislike  and  correct  the  errors  of  others  with  whom 
they  are  friendly.  The  advertising  manager  and  win- 
dow dresser  may  not  give  one  department  a  fair  chance 
while  other  departments  receive  too  much  attention. 

The  superintendent  furnishes  exceptional  employees 
to  one  foreman,  and  another  is  treated  with  unjust  dis- 
crimination. Hundreds  of  such  instances  could  be 
related,  but  these  few  are  sufficient  to  demonstrate  that 
many  employees  commit  acts  to  satisfy  their  personal 
gratification  and  handicap  those  to  whom  they  may  be 
antagonistic. 

They  do  not  realize  that  they  are  all  employed  by  the 
same  concern  and  unless  each  individual  has  the  in- 
terest of  the  concern  at  heart  he  is  indirectly  affecting 
his  own  future.  The  personality  of  the  employer  must 
conquer  the  very  souls  of  the  employees  so  that  the 


198  BUYING  BRAINS 

admiration  for  him  and  the  desire  for  the  concern's 
success  will  destroy  such  germs  as  previously  men- 
tioned. 

A  Stimulus  Needed. — The  minds  of  employees 
should  not  become  so  diseased  as  to  allow  their  mental 
vision  to  become  imperfect.  Brighten  their  lives,  make 
their  hearts  rejoice,  teach  them  good  fellowship,  help 
them  enjoy  their  tasks ;  regardless  of  what  clouds  may 
appear,  they  should  have  confidence  in  you — the  Cap- 
tain of  the  ship. 

Misunderstandings  among  employers  and  employees 
will  occasionally  occur,  but  there  is  no  excuse  for  not 
adjusting  them.  You  do  not  lower  yourself  or  your 
position  when  you  give  an  employee  a  hearing,  judge 
the  facts  fairly  and  render  a  square  decision.  Em- 
ployees know  when  you  are  endeavoring  to  be  just. 
Your  own  mistakes  will  be  excused  if  you  show  right 
intentions. 

Co-operate  with  your  employees  and  you  will  derive 
the  real  pleasure  of  success. 

Success  Through  Co-operation. — Spread  the  seed 
of  contentment  and  there  will  he  a  growth  of  co-opera- 
tion. 

Even  scientific  management  fails  completely  when 
it  is  attempted  without  the  co-operation  of  the  em- 
ployees. Good  intentions  are  frequently  repulsed  when 
they  are  delivered  in  an  arbitrary  manner. 

George  J.  Whelan  retired  from  the  head  of  the 
United  Cigar  Stores  Company  with  the  statement  that 
"the  success  of  the  company  was  largely  due  to  the  co- 
operation of  the  employees." 

Charles  M.  Schwab  said,  '* brains  are  a  bigger  asset 
than  money,  and  that  he  gladly  paid  a  bonus  of  a 


CO-OPERATION  199 

million  to  one  man  and  six  hundred  thousand  dollars 
to  another,  during  the  year  191 5,  who  co-operated  to 
make  the  Bethlehem  a  greater  success." 

Andrew  Carnegie,  Marshall  Field,  John  D.  Rocke- 
feller, and  most  of  the  very  successful  men  received 
the  co-operation  of  their  employees  and  they  deserved 
their  success. 

You  should  have  employees  work  conscientiously  for 
your  success,  think  for  it  and  fight  for  it. 

Let  the  commercial  battle  be  fought  with  you  in  the 
lead  and  every  employee  a  soldier  who  believes  in  you 
and  is  satisfied  with  your  leadership. 


CHAPTER  XI 
ELIMINATION  OF  WASTE 

T^  VERY  employer  is,  to  some  extent,  guilty  of  two 
•*-^  forms  of  waste — commission  and  omission. 
Waste  enters  into  every  establishment  like  dust  creeps 
into  a  home.  To  reduce  this  waste  you  must  constantly 
be  alert — wherever  you  turn  waste  can  be  discovered; 
that  of  itself  may  amount  to  little  but  in  the  aggregate 
totals  an  important  sum. 

The  net  profits  of  concerns  are  usually  a  very  small 
percentage  of  the  receipts  with  the  exception  of  mo- 
nopolies or  articles  controlled  by  patents.  The  elimi- 
nation of  a  portion  of  the  wastes  may  double  the  net 
income  or  change  an  unprofitable  enterprise  into  one 
giving  a  reasonable  profit. 

Several  large  fortunes  have  been  accumulated  out 
of  what  was  considered  waste  material  thirty  years  ago. 
In  the  future  many  fortunes  will  be  made  out  of  the 
wastes  of  to-day. 

The  beef  packers  have  organized  a  number  of  sub- 
sidiary companies  that  have  been  extremely  profitable 
and  have  utilized  materials  that  had  been  regarded  as 
waste  products. 

Profits  Derived  from  Waste. — Formerly  it  was 
customary  to  pay  to  have  waste  paper  removed.  Now 
the  privilege  is  paid  for.  The  papers  are  assorted  and 
forwarded  to  different  mills  where  good  use  is  made  of 
the  stock;  the  owner  has  been  paid,  the  dealer  has 
earned  a  profit  and  the  mill  has  effected  a  saving.  It 
is  not  uncommon  to  see  tugs  or  cars  loaded  with  old 

200 


ELIMINATION  OF  WASTE  201 

tin  cans  that  have  been  accumulated  and  shipped  to  the 
factories  to  be  made  use  of  again. 

During  the  World  War,  owing  to  the  scarcity  of 
wool,  scrap  and  samples  of  woolens  in  quantities  were 
in  great  demand  and  were  sold  at  three  or  four  times 
what  they  would  bring  in  normal  markets.  In  almost 
every  industry  there  is  waste  material  which  can  be 
re-used  and  the  money  obtained  for  such  product  is  a 
net  gain  and  should  receive  careful  consideration. 

The  "World  War"  the  Greatest  of  Wastes.— The 
greatest  waste  ever  known  is  the  "World  War."  It 
is  not  only  a  hardship  for  the  millions  of  Europeans 
and  Americans  but  will  be  a  burden  for  the  generations 
who  will  follow.  The  tremendous  loss  of  lives  and 
property  may  sufficiently  impress  the  rulers  of  the  va- 
rious nations  that  a  World  Congress  may  be  established 
to  settle  future  disputes  so  that  the  large  armies  and 
navies  may  be  abolished.  If  such  would  result,  the 
yearly  waste  of  the  future  may  be  eliminated  and 
the  war  sufferers  would  feel  that  they  have  accom- 
plished something  worth  while  and  that  they  have  not 
sacrificed  their  health  and  property  without  some  bene- 
fit to  the  generations  to  come. 

When  the  chief  topics  in  the  papers  have  been  read, 
it  leaves  an  impression  of  a  large  picture  of  daily  waste, 
both  national  and  international. 

American  Waste. — In  times  of  peace  Americans 
waste  more  than  many  countries  spend,  accumulating 
tremendous  debts  for  future  generations  to  pay  while 
the  revenues  in  most  instances  should  be  sufficient  to 
defray  current  expenses.  Even  the  investigating  com- 
mittees are  frequently  accused  of  wasting  appropria- 
tions allotted  to  them  for  their  necessary  expenses. 


202  BUYING  BRAINS 

During  an  investigation  of  the  Interbo rough  Rail- 
ways of  New  York,  a  small  boy  remarked,  as  he  was 
being  shoved  into  a  subway  car,  that  "he  never  knew 
before  what  became  of  his  nickels."  The  wastes  of 
the  public  service  companies,  as  large  as  they  may  ap- 
pear, can  be  discovered  in  the  same  proportion  if  you 
investigate  smaller  concerns. 

Owing  to  the  size  of  the  concern  and  the  amount  of 
the  waste  they  do  not  attract  so  much  attention,  nor 
make  the  same  impression,  but  usually  exist  and  greatly 
affect  the  growth  of  the  establishment. 

Very  Few  Succeed. — It  is  frequently  stated  that 
less  than  five  per  cent,  of  those  who  enter  into  business 
really  succeed.  Many  of  the  merchants  last  less  than 
a  year  and  the  business  dies  as  an  infant;  others  exist 
a  few  years  and  pass  away  in  the  childhood  stage,  but 
very  few  die  of  old  age. 

A  great  many  merchants  who  remain  in  business 
cannot  be  termed  successful.  They  merely  exist,  earn- 
ing a  bare  living  for  themselves.  The  concerns  which 
meet  their  obligations  (but  are  not  able  to  accumulate 
a  surplus)  do  not  harm  anybody  but  themselves;  those 
which  cannot  pay  their  indebtedness  indirectly  affect 
others  who  are  not  responsible  for  the  improper  man- 
agement. Some  of  the  failures  are  largely  the  result 
of  a  single  weakness  while  others  can  be  traced  to  a 
combination  of  causes.  While  the  buying  and  selling 
methods  are  indirectly  responsible  for  many  failures, 
incompetent  management,  poor  judgment  in  credits 
and  careless  collections  figure  prominently  in  the  disas- 
trous ventures. 

The  National  Cash  Register  Company  had  a  poster 
which  included  76  reasons  why  merchants  fail.     A 


ELIMINATION  OF  WASTE  203 

number  of  them  referred  to  the  use  of  the  cash  register 
and  the  list  will  be  found  well  worth  reading,  as  it 
may  suggest  defects  in  your  business. 

Seventy-six  Reasons  Why  Merchants  Fail. — 

1  Worry 

2  Indecision 

3  Dirty  Floors 

4  No  Records 

5  Poor  Buyers 

6  Poor  Health 

7  Poor  Location 

8  Careless  Clerks 

9  Excessive  Drink 

10  No  Organization 

1 1  Poor  Equipment 

12  Written  Receipts 

13  Don't  "Think" 

14  Too  Conservative 

15  Bad  Store  System 

16  No  Receipt  Given 

17  Give  Short  Weight 

18  Dissatisfied  Clerks 

19  Clerks  not  Trained 

20  Self  Consciousness 

21  Poor  Management 

22  Open  Cash  Drawer 

23  No  Plans  for  Future 

24  Too  Many  Mistakes 

25  Advertise  in  No  Way 

26  Wasteful  with  Goods 

27  Clings  to  Old  Methods 

28  Carelessness  of  Clerks 

29  Give  Too  Much  Weight 


204  BUYING  BRAINS 

30  Poorly  Arranged  Stock 

31  Dissatisfied  Customers 

32  Never  Say  "Thank  You" 

33  Clerks  Run  the  Business 

34  Fail  to  Read  Trade  Papers 

35  No  Definite  Object  in  View 

36  Slow  Service  to  Customers 

37  Too  Many  Bills  Paid  Twice 

38  Discourteous  to  Customers 

39  Bad  Odor  from  Spoiled  Stock 

40  Not  Enough  Help 

41  Creeds,  not  Deeds 

42  Obsolete  Methods 

43  Dimly  Lighted  Store 

44  Purchase  Too  Heavy 

45  Clerks  Not  Interested 

46  Windows  Not  Washed 

47  Dishonesty  of  Employees 

48  Take  Too  Many  Chances 

49  Unsystematic  Deliveries 

50  Will  Not  Consider  Anyone's  Advice 

51  Too  Much  Attention  to  Details 

52  Extravagance  Outside  of  Store 

53  Stock  Not  Moved  Often  Enough 

54  Too  Much  Credit  on  the  Books 

55  Not  Acquainted  With  Customers 

56  Unsalable  Stock  on  Back  Shelves 

57  Try  to  Follow  Everybody's  Advice 

58  Not  Enough  Attention  to  Business 

59  Too  Much  Red  Tape  in  Store  System 

60  Ask  Too  Much  Profit  on  Their  Goods 

61  Fail  to  Profit  by  Experience  of  Others 

62  Forget  to  Charge  Goods  Sold  on  Credit 


ELIMINATION  OF  WASTE  205 

6^  Show  Windows  Not  Used  to  Advantage 

64  Won't  Try  Anything  New  Nor  Investigate 

65  Customers'  Interests  Not  Borne  in  Mind 

66  Fail  to  Profit  by  Their  Own  Experience 

67  Not  Enough  Profit  Asked  for  Their  Goods 

68  Fail  to  Carry  What  Their  Customers  Want 

69  No  Time  for  the  Bigger  Business  Problems 

70  Fail  to  Realize  the  Value  of  Cash  Customers 

71  Spend  Too  Much  Time  in  Unprofitable  Adver- 

tising 

72  Antiquated  System,  Unfit  for  Increased  Busi- 

ness 
y^     Money  Paid  on  Account  not  Properly  Credited 

74  No  Advantages  of  Jobbers'  and  Factories*  Ad- 

vertising 

75  Will  not  Take  Suggestions  from  Clerks  and 

Customers 

76  Believe  in  the  Worn  Out  Proverb,  "Let  Well 

Enough  Alone" 

This  list  was  probably  prepared  with  the  retailer  in 
mind.  Many  of  the  causes  for  failure  referred  to  may 
be  applied  to  other  concerns,  regardless  of  the  particu- 
lar field  they  may  cover. 

Waste  of  Time. — If  the  writer  had  compiled  the 
list  of  why  merchants  fail,  it  undoubtedly  would  have 
been  shorter  and  with  fewer  suggestions,  but  the  first 
item  would  have  been  "waste  of  time."  In  former 
years  employers  and  employees  worked  longer  hours 
as  it  was  customary  in  most  instances  to  remain  until 
the  duties  of  the  day  were  fully  performed.  Many 
of  the  smaller  employers  lived  above  or  in  the  rear  of 
their  stores;  they  visited  other  employers  and  enter- 
tained their  friends  during  business  periods. 


2o6  BUYING  BRAINS 

The  hours  of  both  the  employers  and  employees 
have  been  shortened;  the  business  and  social  life  has 
been  separated  and  now  every  moment  of  business  is 
utilized  for  commercial  purposes.  Employers  with 
equal  ability  vary  in  their  accomplishments  in  accord- 
ance with  the  actual  work  they  perform.  The  average 
employer  really  works  about  one-half  of  the  time  he 
assigns  to  business,  as  he  is  accountable  only  to  himself 
and  maintains  this  practice  for  years  without  realizing 
how  much  time  he  really  wastes.  The  example  of  the 
employer  is  imitated  by  his  employees  who  think  it 
perfectly  proper  to  merely  perform  their  prescribed 
duties,  but  in  their  desire  to  take  it  easy,  overlook  many 
opportunities  for  improvements  and  better  service. 

In  the  larger  establishments  employees  will  be  dis- 
covered in  one  department  with  sufficient  work  to  oc- 
cupy less  than  half  of  their  time  while  in  another  de- 
partment it  is  impossible  for  the  employees  to  complete 
their  tasks  at  the  appointed  time.  A  shifting  of  em- 
ployees for  temporary  periods  may  adjust  the  situa- 
tion so  that  new  employees  will  not  be  required  for 
brief  terms.     This  would  result  in  a  distinct  saving. 

Value  of  Time. — Many  employers  not  only  waste 
their  own  time  but  disregard  the  time-value  of  others. 
Persons  calling  to  see  them  are  frequently  kept  wait- 
ing an  hour  or  more  for  a  few  moments'  interview; 
others  may  call  constantly  before  meeting  them  as 
many  employers  have  no  regular  hours  or  days  set 
aside  when  they  may  be  seen. 

The  average  employee  starts  wasting  his  time  from 
the  moment  he  enters  the  establishment.  It  takes  many 
of  them  a  quarter  or  half  an  hour  before  they  realize 
that  the  business  day  has  begun.     It  is  perfectly  nat- 


ELIMINATION  OF  WASTE  207 

ural  that  most  employees  should  take  it  easy  when  no 
record  is  kept  of  their  work  and  no  incentive  offered 
to  make  them  industrious. 

The  average  employee  can  double  the  amount  of 
work  and  will  do  it  if  his  results  are  recorded  and 
sufficient  encouragement  given  for  maximum  achieve- 
ment. 

Efficient  Methods. — Scientific  management  has  in- 
troduced efficient  methods  which  have  largely  elimi- 
nated waste  of  time.  In  many  concerns  tasks  are  un- 
dertaken which  are  never  completed.  Much  time  and 
effort  are  wasted  as  the  idea  was  not  carefully  con- 
sidered and  analyzed  before  an  attempt  was  made  to 
execute  it. 

Scientific  management  teaches  us  to  analyze,  to 
think,  to  know  the  reason  why,  to  calculate  in  advance, 
and  if  we  would  only  apply  scientific  thought  to  our 
actions  and  decisions,  we  would  waste  less  time  and 
effort.  Before  starting  any  plan,  no  matter  how 
trivial,  mental  calculations  should  be  made,  and  a  care- 
ful, intelligent  study  of  the  problem  and  both  the 
possibilties  and  the  difficulties  pictured.  It  is  fre- 
quently remarked  that  a  "bridge  should  not  be  crossed 
before  coming  to  it,"  but  it  is  far  wiser  to  know  that 
the  bridge  exists  and  to  be  prepared  when  approach- 
ing it. 

Employees  who  follow  a  careless  executive  and  are 
compelled  to  retrace  their  steps  continuously  do  not 
take  their  work  seriously  and  have  little  confidence  in 
the  judgment  and  leadership  of  their  executive. 

Some  employees  perform  their  work  in  a  systematic 
manner  while  others  do  everything  in  a  haphazard 
way.     The  former  accomplish  much  more  with  com- 


2o8  BUYING  BRAINS 

parative  ease  while  the  latter  create  considerable  ex- 
citement without  obtaining  any  results  worth  men- 
tioning. 

Having  a  definite  place  for  each  article  is  a  habit 
easily  cultivated  and  it  saves  many  disputes  as  well  as 
a  great  amount  of  time  which  otherwise  would  be 
wasted. 

Unsystematic  Methods. — A  lawyer  who  was  con- 
sidered rather  brilliant  had  the  habit  of  accumulating 
a  number  of  letters  and  documents  on  the  top  of  his 
desk  and  would  often  consume  half  an  hour  locating 
a  single  paper.  This  attorney  could  have  utilized  this 
tremendous  waste  of  time  and  made  a  more  careful 
preparation  of  his  legal  papers  while  both  he  and  his 
client  would  have  been  materially  assisted. 

The  salesman  can  only  visit  his  trade  certain  hours 
in  the  day  (he  usually  wastes  his  spare  time)  and  when 
he  pleads  his  case  he  is  often  totally  unprepared  to 
furnish  the  desired  information  or  answer  questions 
asked  him.  He  does  not  appreciate  that  he  is  the  law- 
yer in  the  case;  unless  he  presents  his  proposition  in 
a  clear  and  concise  manner  and  is  fully  prepared  to 
respond  to  the  cross  examination  of  his  prospect,  he 
may  lose  an  opportunity. 

It  is  not  always  the  salesmen  or  the  employers  who 
have  the  greatest  ability  who  achieve  the  greatest  suc- 
cess. 

Irregular  Employment. — Every  industry  should 
attempt  to  readjust  conditions  so  that  the  employee 
may  obtain  regular  employment.  Many  workmen  ac- 
quire their  worst  habits  in  times  of  idleness.  It  is  a 
pitiful  condition  to  have  workmen  attempt  to  perform 
impossible  tasks  in  a  few  months  to  be  followed  by 


ELIMINATION  OF  WASTE  209 

several  months  of  idleness.  It  is  costly  to  the  employer 
and  demoralizing  to  the  employee.  Many  machines 
and  a  large  space  are  required  in  the  rush  season  which 
are  non-productive  and  an  expense  in  the  periods  of 
idleness. 

Avoidance  of  Waste  of  Space. — Before  erecting  a 
building  or  leasing  premises,  plans  should  be  carefully 
studied  so  that  each  department  has  ample  room  and 
that  none  of  the  space  shall  be  wasted.  It  is  consid- 
ered preferable  in  most  instances  to  have  less  floors 
and  a  larger  space  on  each  floor  so  that  the  various 
departments  are  more  accessible  to  each  other.  When 
a  crowded  thoroughfare  is  visited  it  will  be  noticed 
how  each  square  foot  is  utilized. 

There  are  many  fixtures  for  sale  and  others  that  can 
be  constructed  so  that  not  only  the  floor  space  is  avail- 
able, but  the  upper  portions  of  a  room  may  become 
valuable. 

In  apportioning  the  expenses  of  the  various  depart- 
ments, it  is  far  better  to  charge  each  department  with 
the  actual  space  occupied  than  to  have  them  share  a 
percentage  of  the  overhead  expenses.  Under  such  cir- 
cumstances the  manager  of  a  department  will  not  de- 
mand more  space  than  is  required  and  will  attempt  to 
be  economical  with  the  space  allotted. 

Analysis. — In  equipping  a  factory  or  purchasing  the 
fixtures  for  a  store  do  not  install  an  equipment  without 
careful  thought  and  calculation.  Many  machines  are 
invented  that  are  not  practical ;  others  are  suitable  for 
one  concern  but  are  wasteful  to  other  establishments. 
It  is  deplorable  to  see  so  many  machines  installed  at 
a  great  expense  only  to  be  discarded  in  a  short  time. 
The  owners  of  many  factories  purchase  more  machines 


2IO  BUYING  BRAINS 

of  certain  types  than  are  actually  required  and  that 
are  used  only  a  fraction  of  the  day.  The  cost  of 
maintenance,  interest  on  investment  and  incidental 
charges  render  them  an  expensive  burden.  Consid- 
erable work  done  by  hand  labor  can  be  done  on  a  ma- 
chine at  a  great  saving. 

The  cost  of  the  machine  may  appear  extravagant 
but  when  the  saving  effected  is  calculated  it  is  dis- 
covered that  the  machine  can  be  paid  for  in  a  short 
period  by  the  saving  in  labor  charges. 

The  writer  saw  a  machine  installed  at  a  cost  of 
$650  that  saved  the  employment  of  four  boys  receiv- 
ing a  total  of  $30  weekly.  In  less  than  six  months  the 
saving  of  wages  paid  for  the  machine,  after  which 
there  was  a  yearly  saving  of  over  $1500. 

Shortly  afterwards  another  machine  was  secured 
for  $250  that  did  the  work  that  required  four  young 
women. 

In  recent  years  many  machines  of  value  have  been 
invented  for  the  busy  office;  they  enact  not  only  a 
great  saving  in  labor,  but  make  it  possible  to  complete 
a  large  amount  of  work  in  a  limited  time.  It  is  ad- 
visable before  purchasing  such  machines  to  inquire  of 
others,  and  see  them  in  actual  operation-,  or  have  them 
installed  on  trial,  as  there  are  many  machines  that  look 
well  on  paper,  and  "sound  well"  when  listening  to  the 
exaggerations  of  an  enthusiastic  salesman,  but  do  not 
measure  up  to  expectation  when  placed  in  use.  Too 
often  we  form  hasty  conclusions  when  we  do  not  go 
below  the  surface  and  when  the  magnifying  glass  may 
reveal  glaring  defects. 

Wasteful  Buying.— Manufacturers,  jobbers  and  re- 
tailers are  compelled  to  purchase  materials  in  the  raw 


ELIMINATION  OF  WASTE  211 

or  finished  product  and  similar  elements  enter  into 
each  business.  As  trading  is  the  buying  and  selling 
of  merchandise,  the  methods  of  buying  are  important 
factors  in  determining  the  success  of  a  business.  By 
being  too  conservative  an  opportunity  may  be  wasted 
in  selling;  if  reckless,  or  careless,  unsalable  stock  may 
accumulate  which  will  affect  the  profits  made  on  the 
sales. 

It  is  important  to  turn  stock  over  frequently;  this 
does  not  mean  purchasing  the  best  sellers  every  week 
and  disposing  of  other  merchandise  once  a  year. 

Many  buyers  do  not  make  their  purchases  scien- 
tifically, do  not  calculate  their  needs  accurately,  fre- 
quently purchase  some  articles  too  extensively  and 
often  too  conservatively. 

A  buyer  should  consult  his  past  sales  and  purchase 
records  and  know  why  merchandise  previously  ordered 
was  not  salable,  otherwise  he  will  repeat  similar  mis- 
takes. A  buyer  should  co-operate  with  the  salesmen 
who  come  into  direct  contact  with  the  customers  and 
who  are  informed  as  to  what  the  patrons  desire  in  ad- 
dition to  the  objections  to  the  merchandise  oflFered  for 
sale. 

Wasteful  purchasing  is  usually  the  result  of  poor 
judgment  of  merchandise,  lack  of  facts  and  records  or 
favoritism.  The  safest  plan  in  purchasing  is  to  con- 
centrate on  the  merchandise  under  consideration  and 
forget  the  personality  of  the  salesman. 

Conservatism. — A  young  man  was  employed  to 
purchase  supplies  for  a  large  concern  and  was  am- 
bitious to  save  at  least  his  salary  by  buying  judiciously, 
economically  and  honestly.  He  was  unfamiliar  with 
most  of  the  articles  he  was  to  purchase  so  he  decided 


212  BUYING  BRAINS 

to  analyze  the  different  purchases  and  obtain  knowl- 
edge regarding  the  supplies  by  receiving  competitive 
prices.  His  assistant  told  him  that  he  was  learning 
considerable  by  listening  to  the  conversations  of  the 
different  salesmen  and  that  he  never  heard  any  person 
ask  "why"  so  often. 

Before  ordering  an  article  he  would  study  the  past 
records,  showing  the  quantity  used  and  the  price  paid. 
He  would  give  the  preference  (if  the  price  and  quality 
were  similar)  to  those  who  had  previously  supplied 
the  article.  Various  representatives  told  him  that  their 
prices  had  never  been  questioned  and  quantities  or- 
dered during  the  past  were  much  larger,  saying  "I  have 
been  selling  your  house  for  so  many  years  and  I  am  a 
friend  of  an  officer  of  the  corporation."  He  played 
no  favorites,  but  purchased  conscientiously ;  his  actions 
were  upheld,  and  it  may  be  mentioned  that  he  saved 
his  salary  for  his  employers.  Buying  from  friends  for 
sentimental  reasons  may  be  excused  but  placing  orders 
for  personal  profit  is  unpardonable. 

The  Dangers  of  Subsidizing. — An  act  of  one  of 
the  buyers  in  a  department  store  was  recently  discov- 
ered. This  buyer  received  a  fixed  amount  on  each 
piano  purchased  and  it  was  related  in  the  press  as  an 
exceptional  case.  This  practice  is  not  only  indulged 
in  by  many  buyers,  but  leading  officers  of  large  cor- 
porations often  collect  considerable  revenue  from  such 
sources. 

At  the  beginning  of  the  World  War  some  of  the 
foreign  agents  who  were  entrusted  with  the  power  to 
purchase  for  their  respective  countries  demanded 
enormous  fees  and  commissions.  Quality  and  price 
were  ignored  and  contracts  were  given  to  concerns  that 


ELIMINATION  OF  WASTE  213 

would  conspire  with  the  agents  to  defraud  their  own 
governments.  It  was  stated  that  an  order  for  100,000 
pairs  of  shoes  was  placed  with  the  understanding  that 
the  agent  was  to  receive  25  cents  for  each  pair,  or  a 
total  of  $25,000  for  the  single  transaction. 

Diagnosis. — While  the  ''World  War"  has  been 
beneficial  to  many  concerns  and  industries,  the  com- 
mercial stagnation  that  arose  shortly  after  war  was 
declared  created  an  alarm  among  many  merchants 
who  discovered  that  they  had  been  extremely  wasteful. 

In  normal  times  when  business  conditions  are  satis- 
factory, little  attention  is  given  the  wasteful  practices. 
When  dark  clouds  appear,  we  begin  to  think,  analyze, 
calculate  and  eliminate  wastes.  A  person  enjoying 
fair  health  does  not  appreciate  it  fully,  is  liable  to 
cultivate  injurious  habits  and  only  when  he  becomes  ill 
realizes  the  value  of  good  health  and  resolves  not  to 
neglect  it  in  the  future. 

It  is  quite  similar  when  an  enterprise  becomes  finan- 
cially ill;  you  then  begin  to  examine,  investigate  and 
diagnose  the  business. 

A  person  dies  of  a  single  disease,  and  a  business  may 
be  ruined  by  a  single  weakness.  An  organisation  is  no 
stronger  than  its  weakest  link.  You  should  not  be 
too  contented  with  your  achievements,  but  should  dis- 
cover the  mistakes  in  normal  times  and  thus  be  better 
able  to  withstand  the  panics  and  periods  of  depression. 
Entirely  too  much  is  left  to  the  imagination  and  guess- 
work. Records  should  be  kept  and  an  accounting 
should  indicate  where  the  weakness  exists.  If  you 
would  consult  your  records,  the  waste  in  time  would 
be  detected,  also  the  equipment  and  the  results  of  errors 
would  show  on  the  surface. 


214  BUYING  BRAINS 

Economy. — Factories  which  maintain  three  shifts, 
the  machinery  being  thus  used  continuously,  effect  a 
great  saving  when  compared  to  other  concerns  who 
have  the  customary  run  of  only  eight  to  ten  hours. 

If  machines  are  used  only  a  fraction  of  a  working 
day  and  records  are  kept,  they  should  inform  you  of 
the  waste  and  you  should  then  attempt  to  eliminate  it. 
As  the  wastes  grow  the  overhead  expenses  become 
proportionately  greater,  thereby  reducing  profits; 
otherwise  higher  prices  must  be  charged  than  that  of 
a  scientific  competitor  who  is  in  a  position  to  undersell. 

Factories  conducted  scientifically  lower  the  cost  of 
supervision,  maintenance  and  labor.  When  failures 
are  diagnosed,  it  is  frequently  stated  that  the  concern 
made  money  in  most  of  the  departments,  or  on  most 
of  the  articles  handled,  but  that  the  failure  was  the 
result  of  losses  in  other  departments. 

Some  of  the  most  profitable  concerns  are  the  resur- 
rections of  wrecked  estabHshments  with  the  wastes 
eliminated. 

Comparisons. — Comparisons  are  often  made  be- 
tween the  business  of  yesterday  and  to-day.  The  de- 
fenders of  past  methods  claim  that  many  concerns 
became  very  successful  without  science  or  system. 
The  statement  is  correct,  but  the  merchant  of  yesterday 
did  not  have  as  a  competitor  the  scientific  merchant  of 
to-day. 

In  former  years  business  was  conducted  more  loosely 
and  men  were  successful  in  spite  of  neglected  oppor- 
tunities and  wasteful  methods.  Each  succeeding  year 
will  find  us  working  more  scientifically  with  a  larger 
portion  of  the  wastes  eliminated.  Persons  who  are 
satisfied  with  inherited  methods  will  eventually  de- 


ELIMINATION  OF  WASTE  215 

stroy  the  value  of  their  inheritance.  Putting  new  blood 
into  a  business  should  mean  the  entrance  of  those  who 
are  not  satisfied  with  antiquated  ideas  but  who  believe 
a  programme  is  satisfactory  merely  until  a  better  plan 
can  be  devised. 

A  young  man  who  was  about  to  return  home  to 
enter  into  partnership  with  his  father  remarked, 
"Father  is  going  to  make  me  a  partner ;  before  doing 
so  he  sent  me  out  into  the  commercial  world  to  learn 
the  modern  methods.  He  expects  me  to  bring  into 
the  business  such  knowledge  as  he  had  no  opportunity 
to  acquire.*'  Do  not  cling  to  the  ideas  that  made  you 
successful;  accept  such  information  as  will  strengthen 
them  and  make  your  success  permanent. 

It  is  needless  to  repeat  the  wastes  in  employment, 
development  and  training  of  employees;  the  wastes 
caused  by  strikes  are  well  known.  There  are  hundreds 
of  forms  of  wastes  which  can  be  eliminated,  if  the 
habit  of  detecting  them  be  cultivated. 

Wasted  Opportunities. — Wastes  of  commission 
can  be  corrected;  wastes  of  omission  may  not  be  dis- 
covered until  a  long  period  has  elapsed.  Many  a  per- 
son will  tell  of  a  neglected  opportunity  and  how  he 
allowed  a  fortune  to  slip  from  his  hands — but  you 
must  be  able  to  grasp  an  opportunity  when  it  appears. 

Opportunity  may  knock  at  the  door  but  if  you  dis- 
regard the  sound  of  the  knock,  others  who  are  alert 
will  probably  take  advantage  of  it.  Every  new  idea 
appeals  to  some  persons;  others  prefer  to  let  well 
enough  alone.  Every  opportunity  cannot  be  seized,  but 
you  cannot  afford  to  ignore  every  innovation.  You 
must  be  able  to  analyze  a  new  proposition  by  making 
calculations  similar  to  your  arithmetic  problems  in 


2i6  BUYING  BRAINS 

your  school  days.  It  is  merely  a  question  of  addition 
and  subtraction.  Add  the  advantages  together  and  sub- 
tract the  disadvantages  and  the  problem  is  solved  by 
•finding  the  sum  total. 

Each  year  brings  forth  a  new  crop  of  speculators 
the  majority  of  whom  lose  their  fortunes  in  the  stock 
market ;  while  a  few  professionals  continue  to  trade  in 
stocks  year  after  year  with  phenomenal  success.  The 
average  individual  thinks  certain  corporations  will 
earn  large  dividends.  Yes,  but  the  professional  trader 
obtains  all  available  information  and  makes  a  mental 
calculation  before  investing.  Ignorance  contests  with 
knowledge,  guess-work  with  calculation,  carelessness 
with  science,  and  yesterday  with  to-day,  and  you  will 
discover  that  the  person  with  knowledge  who  calcu- 
lates and  works  scientifically  with  the  methods  of  to- 
day, will  be  the  victor. 


CHAPTER  XII 

BUYING  BRAINS 

A  FEW  years  ago  the  writer  was  seated  at  a  table 
-^^  in  a  suburban  hotel  with  several  grain  brokers. 
The  orders  for  dinner  were  taken  by  the  waiter  who 
returned  a  few  moments  later  greatly  confused  and 
served  the  wrong  dishes  to  each.  The  writer  re- 
marked, "There  appears  to  be  a  shortage  of  brain  this 
season."  The  brokers  misunderstood  and  quickly  ex- 
plained the  reason  for  the  shortage  of  grain. 

There  was  a  lack  of  brain  on  the  part  of  the  waiter 
in  this  particular  instance.  In  every  concern  it  can  be 
discovered  in  various  directions.  It  is  the  one  neces- 
sary element  for  which  the  demand  is  always  greater 
than  the  supply. 

The  physical  possibilities  of  man  may  be  limited,  the 
mental  achievement  unlimited.  It  is  not  difficult  to 
secure  physical  workers  but  to  obtain  the  mental  man 
to  direct  the  physical  workmen  is  not  so  simple.  For 
every  man  who  is  physically  lazy  there  are  dozens  who 
are  mentally  lazy.  Employers  and  employees  perform 
their  daily  tasks  in  a  routine  manner  without  giving 
their  actions  any  mental  consideration;  persons  read 
the  papers,  magazines  and  books  without  thinking 
about  what  they  are  reading. 

Very  often  new  employees  have  been  sent  out  by 
others  to  purchase  buckets  of  electricity,  left-handed 
hammers  and  many  other  non-existing  articles,  and 
when  the  individual  has  returned  after  a  long  search, 
has  found  the  others  laughing  at  his  ignorance. 

217 


2i8  BUYING  BRAINS 

Consulting  the  Physician. — If  you  are  111  you  con- 
sult your  physician.  He  may  tell  you  that  you  smoke, 
drink,  eat,  or  worry  too  much.  He  diagnoses  your 
case  and  will  probably  inform  you  of  a  reason  for 
your  illness  which  you  know  to  be  true.  You  have  not 
given  yourself  serious  thought  and  you  have  continued 
habits  that  were  detrimental  to  your  very  existence. 
He  has  discovered  your  weakness  for  you.  He  con- 
vinces you  of  the  importance  of  changing  your  habits. 

The  difference  between  the  physician  and  you  is 
that  you  pay  him  to  think  for  you.  He  has  capitalized 
his  brain,  while  you  unconsciously  knew  what  ailed 
you  but  did  not  use  your  mentality. 

The  Counselor  df  Business. — It  is  the  same  in  busi- 
ness, mistakes  are  repeated.  You  may  fail  to  serve 
properly,  are  not  careful  about  credits,  fail  to  place 
orders  in  advance,  do  not  concentrate,  are  satisfied  to 
leave  well  enough  alone,  do  not  develop  your  organiza- 
tion, do  not  analyze  your  business,  or  on  the  other  hand 
your  establishment  may  suffer  from  a  dozen  other 
ailments. 

During  the  past  it  has  been  customary  to  continue 
such  practices  for  years  until  they  were  discovered  by 
a  receiver  when  it  was  too  late  to  restore  the  business 
to  life.  To-day  we  see  the  birth  of  a  new  profession, 
the  industrial  doctor,  the  mercantile  counselor,  the  efd- 
ciency  engineer,  or  whatever  you  prefer  to  call  him. 

In  former  years  the  merchant  was  very  reticent  about 
his  business.  He  seldom  confided  in  any  person  ex- 
cept his  lawyer  who  frequently  was  unable  to  advise 
him  regarding  commercial  problems. 

Not  having  had  industrial  experience,  many  lawyers 
were   unacquainted   with   mercantile   affairs    (except 


BUYING  BRAINS  219. 

from  a  legal  aspect),  and  naturally  could  not  furnish 
the  assistance  that  was  actually  needed. 

When  Mr.  Frederick  W.  Taylor  first  expounded  the 
principles  of  scientific  management,  many  of  the  lead- 
ing engineers  refuted  his  claims  and  a  very  small  per- 
centage of  employers  gave  his  ideas  any  consideration ; 
nevertheless,  we  have  witnessed  the  possibilities  of 
scientific  management. 

Many  concerns  have  introduced  it  in  their  industries 
and  others  will  be  compelled  to  adopt  scientific  methods 
if  they  desire  to  compete  with  those  who  have  accepted 
modern  ideas. 

Do  not  imagine  that  your  business  is  different  from 
all  others,  that  it  cannot  be  conducted  scientifically  or 
that  there  is  no  opportunity  for  improvement. 

The  Need  of  a  Thinking  Machine. — A  new  sales- 
man for  a  house  organ  that  was  syndicated  remarked 
that  "He  was  surprised  at  the  comparative  ease  of  in- 
terviewing some  of  the  most  important  men  in  New 
York,"  and  added  that  **It  is  not  difficult  to  submit 
new  ideas  to  the  really  big  men,  but  the  men  who  think 
they  are  big  are  the  hardest  to  interview." 

Executives  and  employers  who  are  too  busy  to  devote 
any  portion  of  their  time  to  improvements  should  em- 
ploy some  person  within,  or  on  the  outside,  to  do  such 
thinking  for  them.  Many  persons,  both  employers  and 
employees,  become  accustomed  to  perform  their  duties 
in  a  perfunctory  manner  and  convince  themselves  that 
it  is  the  best  and  proper  way  of  doing  it. 

Very  few  organizations  are  strong  in  every  depart- 
ment.    The  weakness  must  be  found  and  corrected. 

The  most  successful  concerns  have  been  the  first  to 
consult  outside  specialists.    The  larger  concerns  that 


220  BUYING  BRAINS 

have  brainy  men  on  their  pay  rolls  are  the  most  liberal 
in  this  respect;  the  smaller  and  less  successful  establish- 
ments are  the  most  reluctant  to  engage  specialists  to 
assist  them  in  correcting  their  errors  and  improving 
their  business. 

In  the  smaller  concerns  an  individual  is  often  com- 
pelled to  perform  a  varied  list  of  duties,  for  many  of 
which  he  has  had  no  training  and  is  not  mentally 
equipped. 

The  small  merchant  frequently  considers  it  a  needless 
expense  to  employ  any  person  in  an  advisory  capacity. 
He  expects  to  purchase  brains,  combined  with  muscle, 
by  the  week.  He  does  not  realize  that  a  single  thought 
or  idea  may  change  his  entire  commercial  life. 

Where  the  Scientific  Man  Shines. — Not  only  the 
largest  industrial  concerns  have  engaged  specialists 
but  the  leading  railroads  and  our  government  also 
have  employed  efficiency  engineers  to  suggest  and  plan 
improvements. 

The  man  who  thinks  he  knows  it  all  eventually  dis- 
covers how  little  he  knows,  and  when  it  is  almost  too 
late  he  is  anxious  to  buy  brains. 

A  great  many  concerns  are  guided  by  men  who  are 
not  aware  of  what  is  going  on  in  their  own  establish- 
ments, much  less  what  is  being  done  by  progressive 
competitors.  Improvements  to  some  of  our  greatest 
inventions  are  being  registered  in  the  Patent  Office  and 
the  inventors  are  not  satisfied  to  let  well  enough  alone, 
though  their  inventions  have  made  their  product  prac- 
tically a  monopoly. 

Large  concerns  employ  their  own  accountants  and 
have  certified  accountants  calling  periodically  to  ex- 
amine the  work  of  the  regular  accountant.     Smaller 


BUYING  BRAINS  221 

concerns  that  cannot  afford  accountants  daily,  have 
them  call  weekly  or  monthly  to  simplify  the  bookkeep- 
ing and  show  the  result  of  actual  records,  such  as  sales, 
expenses,  purchases,  profit  or  loss,  and  submit  com- 
parative figures  for  corresponding  periods. 

To  be  successful,  you  should  be  able  to  read  figures 
accurately,  and  you  must  have  accurate  figures.  The 
accountant  points  out  in  figures  what  has  taken  place 
during  the  past  week,  month  or  year. 

He  places  before  you  the  mirror  of  your  business 
and  gives  you  an  opportunity  for  thought  and  reflec- 
tion, when  he  shows  you  your  actual  worth. 

The  mercantile  counselor  or  efiiciency  engineer,  the 
new  adjunct  to  business,  assists  you  to  improve  condi- 
tions so  that  the  figures  will  prove  more  satisfactory. 

Do  not  confuse  these  two — the  one  improves,  and 
the  other  shows  you  the  improvement. 

The  writer,  while  walking  through  a  bankrupt  es- 
tablishment, overheard  the  following  conversation: 
One  of  the  clerks  stated  that  '^changes  had  been  sug- 
gested by  an  efficiency  expert.''  The  other,  who  was 
a  younger  man,  asked,  "What  is  an  efficiency  man  sup- 
posed to  do  ?"  The  older  clerk  replied,  '*He  is  engaged 
to  go  through  the  store,  discover  the  mistakes  and  im- 
prove the  system."  The  younger  employee  looked 
astonished  as  he  said,  That  certainly  is  an  easy  berth; 
it  is  a  *cinch'  to  find  hundreds  of  mistakes  here.  I 
wonder  why  they  waited  until  they  failed  before  they 
got  a  man  to  show  <:hem  their  mistakes  ?" 

Since  hearing  this  conversation,  the  writer  has  been 
thinking  of  the  same  thing  every  day,  *'Why  do  so 
many  concerns  wait  until  they  are  bankrupt  before 
they  look  for  their  mistakes?" 


222  BUYING  BRAINS 

The  efficiency  engineer,  by  rendering  service  to  many, 
is  able  to  accumulate  considerable  knowledge  and  in- 
formation, and  his  varied  experiences  broaden  his 
views  and  open  his  mind  so  that  he  may  increase  his 
usefulness  and  make  use  of  his  resources  for  your 
good.  He  may  not  understand  the  details  of  your 
particular  business  as  well  as  you  or  your  humble  em- 
ployees, but  he  possesses  the  power  of  detecting  errors 
and  is  able  to  show  you  the  simple  methods  of  improv- 
ing conditions. 

Confidence  Begets  Confidence. — Do  not  employ 
an  efficiency  man  unless  you  and  your  associates  have 
confidence  in  him  and  are  ready  to  co-operate  with  him. 
The  efficiency  engineer  who  causes  discord  to  accom- 
plish results  has  failed  in  his  mission. 

Scientific  management,  like  any  business,  is  impos- 
sible of  success  without  co-operation.  The  reason  rail- 
road officials  and  employees  attempted  to  block 
efficiency  engineering  was  because  it  was  asserted  that 
the  railroads  could  save  a  million  a  day.  They  were 
unwilling  to  permit  the  stockholders  and  the  public  to 
believe  that  they  had  been  so  wasteful  in  their  practices. 

The  successful  efficiency  engineer  is  unassuming  and 
tactful,  and  does  not  make  unnecessary  exaggerated 
claims.  His  accomplishments  should  be  such  that  they 
speak  for  him — and  they  usually  do. 

The  efficiency  engineer  will  not  only  obtain  satisfac- 
tory results,  but  will  study  his  results  so  that  he  may 
continue  to  increase  them. 

This  is  the  day  of  the  specialist;  employers  should 
not  leave  too  much  to  imagination  or  guess  work.  They 
should  have  their  problems  analyzed  scientifically  and 
should  invite  expert  advice. 


BUYING  BRAINS  223 

In  the  Limelight. — This  scientific  method  of  con- 
ducting business  is  making  it  more  profitable  and  pleas- 
ant, the  employer  works  with  an  understanding,  with 
all  of  the  lights  turned  on,  as  he  is  tired  of  groping  in 
the  dark. 

Scientific  management  is  regarded  by  many  persons 
as  merely  common  sense  management  properly  applied. 
The  lack  of  common  sense  in  so  m^any  of  our  actions 
makes  it  necessary  for  us  to  conduct  our  acts  scientific- 
ally. 

When  scientific  management  is  introduced,  the  ad- 
justment of  wages  may  require  an  outsider  to  help 
determine  the  compensation  to  be  paid,  as  you  may  be 
too  vitally  interested  to  decide  upon  an  equitable  basis. 

Many  a  business  is  ailing;  others  are  neglecting 
golden  opportunties.  Most  concerns  are  not  receiving 
the  full  earnings  that  are  within  their  reach,  and  it  is 
for  the  specialist  to  awaken  them  so  that  they  may  ob- 
tain maximum  profits. 

Some  employers  refuse  to  entertain  ideas  or  sugges- 
tions from  humble  employees,  judging  every  thing  and 
every  person  from  a  monetary  standpoint;  they  fail 
to  recognize  intelligence  among  their  own  employees. 
The  efficiency  expert  could  assist  such  employers  to 
develop  the  employees  and  welcome  their  suggestions. 

Retrogression. — Many  employers  of  yesterday  are 
employees  of  to-day,  and  some  are  among  the  unem- 
ployed. Formerly,  loose  management  competed  with 
similar  practices  in  other  establishments,  but  to-day 
antiquated  methods  make  it  impossible  to  compete  with 
scientific  and  progressive  management. 

In  every  community  and  in  each  industry  we  have 
leading   concerns    of    twenty   years    ago    going   into 


224  BUYING  BRAINS 

bankruptcy  or  discontinuing  business.  They  failed  to 
recognize  the  change  going  on  in  business,  and  the  un- 
heard-of concerns  of  twenty  years  ago  are  now  taking 
their  places. 

You  often  hear  of  a  concern  putting  young  blood 
in  the  business,  or  that  it  is  the  young  man's  day.  The 
reason  for  this  is  that  many  of  the  older  men  refuse  to 
change  their  methods  and  adhere  too  closely  to  prec- 
edent. The  older  men  who  are  progressive,  open- 
minded  and  willing  to  adjust  themselves  to  new  condi- 
tions, have  not  only  the  advantages  of  experience,  but 
in  addition,  have  many  other  valuable  assets  that  youth 
does  not  possess. 

You  must  go  forward  or  backward;  you  cannot  stand 
still  for  a  long  period;  standing  still  is  usually  followed 
by  a  backward  slide. 

If  You  Consider  Your  Prestige  Worth  Anything, 
Buy  Brains. — If  you  have  an  organization  and  com- 
mercial prestige,  you  have  a  nucleus  for  greater  possi- 
bilities ;  it  is  for  you  to  collect  all  of  the  profits  that  are 
within  your  grasp. 

You  should  keep  abreast  with  the  times,  judge  your- 
self correctly,  and  above  all,  do  not  hesitate  to  buy  the 
brains  that  will  help  you  overcome  your  weaknesses. 

The  egotist  of  ten  years  ago  refused  to  consult 
specialists,  and  to-day  recognizes  his  error  and  wel- 
comes them  with  open  arms.  The  egotist  of  to-day 
may  not  be  in  a  position  to  employ  an  expert  ten  years 
hence. 

Edward  N.  Hurley,  of  the  Federal  Trade  Commis- 
sion, said,  ''The  astonishing  thing  is,  that  of  250,000 
business  corporations  in  this  country,  over  100,000 
have  no  net  income  whatever.     In  addition,  90,000 


BUYING  BRAINS  225 

make  less  than  $5,000  a  year,  while  the  60,000  remain- 
ing are  the  more  successful  ones  and  only  make  $5,000 
a  year  and  over."  These  figures  may  startle  you,  but 
you  must  remember  that  this  list  represents  the  survival 
of  the  fittest.  Many  thousands  of  corporations  that 
have  passed  out  of  existence  have  had  a  weakness  that 
they  failed  to  discover  even  at  the  crucial  moment,  but 
which  if  unearthed  would  have  saved  the  enterprise. 

The  R.  G.  Dun  Company  show  the  figures  for  a 
period  of  nine  months,  during  which  12,841  firms 
failed,  with  liabilities  aggregating  $271,918,021. 

Bradstreet's  claim  that  nearly  thirty  per  cent,  of  the 
failures  are  due  to  incompetence,  the  same  percentage 
fail  for  the  lack  of  capital,  seven  per  cent,  from  per- 
sonal extravagance,  and  five  per  cent,  on  account  of 
inexperience. 

As  ten  per  cent,  of  the  failures  are  attributed  to 
fraud,  a  much  larger  percentage  of  those  who  are  only 
partially  successful  show  the  result  of  incompetence. 

It  is  surprising  how  few  manufacturing  retailers 
have  an  accurate  cost  system,  and  many  of  them  often 
sell  the  finished  product  at  a  loss  when  they  imagine 
they  are  making  a  profit  on  the  transaction. 

Records  of  Cost  Are  Necessary. — In  the  printing 
business  it  is  not  uncommon  to  have  estimates  vary 
considerably,  and  some  of  the  largest  users  of  printing 
have  abandoned  conducting  their  own  plants  as  they 
discovered  it  is  less  expensive  to  have  the  work  done  by 
others. 

The  merchant  who  has  no  accurate  cost  system  not 
only  injures  himself  but  he  is  a  detriment  to  others  in 
the  same  industry  and  contributes  to  a  demoralization 
of  trade  conditions. 


226  BUYING  BRAINS 

Many  of  the  smaller  merchants  do  not  make  proper 
allowances  for  overhead  charges,  depreciation  of  stock 
and  machinery,  and  losses  through  credit  as  well  as 
other  items  that  affect  their  individual  business.  For 
every  merchant  who  buys  too  conservatively  we  have 
as  many  who  overbuy.  They  do  not  accurately  calcu- 
late their  needs  and  make  their  purchases  only  through 
guess  work. 

Many  merchants  grant  credits  and  make  collections 
in  a  haphazard  manner  and  are  unable  to  meet  their 
obligations  through  their  ignorance  and  indifference 
to  an  important  factor  in  their  business. 

Carelessness  in  Credit. — A  prominent  merchant 
was  asked  to  withdraw  his  application  for  membership 
in  an  exclusive  club,  being  informed  that  "it  did  not 
care  to  open  its  doors  to  tradesmen." 

He  withdrew  his  application  and  stated,  "He  could 
afford  to  retire  if  all  of  the  members  of  that  exclusive 
club  would  pay  him  their  indebtedness." 

An  honorable  and  successful  merchant  is  on  an  equal 
footing  with  the  banker,  lawyer  or  doctor,  A  man 
should  not  he  judged  with  a  group  of  men  hut  hy  his 
individual  acts  and  achievements. 

The  career  that  you  may  select,  or  that  which  is 
determined  for  you  by  your  parents  or  guardians,  is 
frequently  beyond  your  control ;  the  important  question 
is,  "Are  you  a  credit  to  your  occupation  whatever  it 
may  he?" 

Generalities. — There  are  a  number  of  positives  and 
negatives  that  enter  into  a  business,  the  same  as  the 
qualities  of  an  individual,  and  it  is  for  you  to  reduce 
the  negative  and  increase  the  positive  in  your  establish- 
ment. 


BUYING  BRAINS  227 

//  you  fail  to  discover  your  weakness,  or  are  unable 
to  cope  with  the  conditions,  you  lack  judgment,  will 
power  or  brains. 

The  men  in  your  employ  should  be  of  such  types  as 
can  be  helpful  to  reduce  the  negatives.  If  they  do 
not  measure  up  to  the  demands,  you  should  employ  as 
many  brainy  men  as  you  can  afford,  either  permanently 
or  temporarily. 

Brains  rule  the  world  and  everything  therein. 
Brains  make  the  man,  the  merchant,  the  corporation, 
the  state,  the  nation.  Your  brain  may  be  small  in 
dimension  and  light  in  weight,  but  it  is  your  gray  mat- 
ter that  determines  what  you  are. 

Your  brain  has  placed  you  in  your  present  position, 
whether  it  be  high  or  low.  Your  brain  should  direct 
you  and  tell  you  why  you  are  failing.  If  your  brain 
has  too  much  consideration  for  you,  then  your  brain 
should  direct  you  to  select  others  who  will  supply  the 
brain  power  and  furnish  you  with  that  in  which  you 
may  be  deficient. 

Surround  yourself  with  brainy  employees,  associate 
with  brainy  men,  read  good  literature  that  will  feed 
your  brain  with  the  thoughts  of  men  who  have  brains. 
Cultivate  the  habit  of  learning  from  others,  be  a  good 
listener,  and  remember  that  which  is  worth  while  and 
cast  aside  thoughts  that  are  not  worth  recalling. 

When  you  do  the  talking,  the  time  is  occupied  by 
telling  others  what  you  already  know ;  give  the  others 
a  chance  to  converse  and  you  may  learn  facts  that  are 
new  to  you  and  worth  knowing. 

It  would  be  folly  to  attempt  to  estimate  the  value 
of  the  brains  of  such  men  as  Frederick  W.  Taylor, 
Harrington  Emerson,  H.  L.  Gantt  and  other  success- 


228  BUYING  BRAINS 

ful  engineers  who  have  saved  and  created  miUions  for 
the  concerns  that  employed  them. 

There  have  been  many  who  have  disposed  of  their 
brains  to  the  advantage  of  hundreds  of  industries. 
Among  them  are  men  whom  you  probably  could  not 
afford  to  employ  permanently,  but  in  some  instances  a 
single  idea  from  them  has  transformed  an  industry. 

Things  You  Should  and  Should  Not  Do.— This 
is  the  day  of  the  specialist  in  all  fields  of  endeavor, 
among  commercial  men  and  in  professional  Hfe. 

If  you  want  your  windows  attractive  and  do  not 
employ  a  person  capable  of  trimming  them  properly 
you  should  have  a  window  dresser  call  at  regular  in- 
tervals to  do  the  work. 

If  you  desire  to  advertise  and  do  not  employ  an  ad- 
vertising man,  don't  spend  a  week  attempting  to  write 
an  article  that  will  not  produce  results — engage  a 
specialist  who  ''knows  how." 

If  your  books  do  not  tell  you  what  you  ought  to 
know  send  for  an  accountant. 

If  your  factory  or  business  is  not  producing  maxi- 
mum results  employ  a  specialist  who  will  show  you  the 
way. 

Do  not  bury  your  head  in  your  desk,  do  not  pace  the 
floor,  do  not  lie  awake  at  night  when  you  should  be 
resting  your  brain  for  the  next  day's  work.  Buy  brains 
that  will  assist  you  to  overcome  obstacles  so  that  you 
will  not  spend  your  time  in  worry  and  indecision.  It 
is  essential  that  you  devote  your  entire  energy  to  direct- 
ing and  acting  wisely  for  therein  lies  your  success. 

While  the  Bethlehem  Steel  Company  was  busy  mak- 
ing millions  of  dollars'  worth  of  ammunition  in  addi- 
tion to  completing  many  other  huge  contracts,  Charles 


BUYING  BRAINS  229 

M.  Schwab  had  time  to  speak  at  luncheons  in  New 
York  and  elsewhere. 

Brainy  men  employed  by  him  were  managing  this 
gigantic  industry  during  his  absence ;  he  knew  he  had 
selected  the  right  type  of  men.  Mr.  Schwab  stated 
that  ''brains  are  a  bigger  asset  than  money"  and  as 
heretofore  mentioned,  that  "during  the  preceding  year 
he  had  paid  a  million  dollars  to  an  assistant  as  a  bonus 
in  addition  to  his  salary;  he  had  distributed  fifteen  to 
twenty  per  cent,  of  the  profits  to  brainy  executives 
before  he  had  paid  any  dividends  to  the  stockholders." 
He  recognized  the  value  of  employing  brainy  men  and 
paying  them  liberally  for  what  they  produced. 

Men  of  brains  do  not  hesitate  to  buy  additional 
brains. 

Brains  are  the  life  of  your  business.  It  is  far  better 
to  have  brainy  men  employed  regularly,  so  that  you 
may  have  their  counsel  continuously  and  absorb  a  por- 
tion of  their  knowledge. 


IF  THERE  IS  A  SHORTAGE,  DO  NOT 

HESITATE  TO  GO  OUTSIDE 

AND  BUY  BRAINS. 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  50  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.00  ON  THE  SEVENTH  DAY 
OVERDUE. 


) 1 

FEB     :11939 

MAR  m    1939 

•»- 

APR  18  1939 

DEC  12ig4l)lvi 

^  oc;  19^^ 

py^  a^  ^^ 

1 

t^.ie-  ^^^    t         ' 


L-/      \^y^  I  v^i 


<:7\,   --- 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


